Rishi Sunak’s billionaire wife should backdate her tax payments and cough up millions more pounds to the treasury, opposition MPs have said.
Akshata Murty announced on Friday that she would pay UK taxes on all her foreign income as she did not want her financial arrangements to be a ‘distraction’ for her husband.
The dramatic move came after it was revealed she was listed as a non-domicile for tax purposes, meaning she legally did not have to pay taxes to the British government on money she made overseas.
It has been estimated that Ms Murty, a fashion designer and the daughter of an Indian billionaire, potentially saved up to £20 million in UK tax through the arrangement.
Last night, the heiress said she had done nothing wrong but acknowledged some people did not see her tax status as being compatible with her husband’s position.
The row comes at a time when Mr Sunak has faced intense criticism over his failure to do more to help families struggling with the soaring cost of living while hiking taxes to their highest levels since the 1950s.
After Ms Murthy announced that she will now pay UK taxes on her overseas income, opposition parties called on her to go one step further and pay the money back in full.
Liberal Democrat treasury spokeswoman Christine Jardine said: ‘This shows that Rishi Sunak’s wife could have paid her fair share of taxes in this country all along, despite his initial claims.
‘Doing something just because you’ve been found out isn’t good enough.’
‘Sunak’s household now needs to backdate these taxes in full.
‘Perhaps then the Chancellor will feel he can afford proper help for families struggling with soaring energy bills.’
Shadow transport secretary Louise Haigh said that while the arrangement was legal, Mr Sunak had failed to be transparent about his family’s tax status at a time when he was raising taxes for millions of people.
‘The Chancellor has not been transparent. He has come out on a number of occasions to try and muddy the waters around this and to obfuscate,’ she told BBC Radio 4’s Today programme.
‘It is clear that was legal.
‘I think the question many people will be asking is whether it was ethical and whether it was right that the Chancellor of the Exchequer, whilst piling on 15 separate tax rises to the British public, was benefiting from a tax scheme that allowed his household to pay significantly less to the tune of potentially tens of millions of pounds less.’
Meanwhile SNP leader Nicola Sturgeon said Mr Sunak’s family’s tax situation has shown how the chancellor and his wife are in a ‘completely different universe in financial terms’ from ordinary people left struggling by the cost-of-living crisis.
In a statement on Friday, Ms Murty said: ‘I understand and appreciate the British sense of fairness and I do not wish my tax status to be a distraction for my husband or to affect my family.
‘I do this because I want to, not because the rules require me to.’
Mr Sunak had previously denounced the disclosure of his wife’s tax status as a ‘smear’ by opponents intended to damage him politically.
His wife’s U-turn came just hours after Mr Sunak admitted that he had continued to hold a US green card – granting him permanent residency in the United States – for a period while he was chancellor.
Labour said there were still ‘far too many troubling questions’ to be answered and called for ‘full transparency’ from Mr Sunak regarding his financial affairs.
This includes whether Ms Murthy would use her Indian citizenship and a treaty with the UK dating back to the 1950s to avoid paying inheritance tax – a move which could reportedly save tens of millions of pounds.
But allies of the chancellor jumped to defend him and his wife today.
Kevin Hollinrake, the Tory MP for Thirsk and Malton in North Yorkshire, said both Conservative and Labour governments had used non-dom status to attract wealthy people to the country.
‘This is not a tax dodge. It is a deliberate policy to attract wealthy people from other countries around the world to the UK on the basis that they create jobs and create wealth in the UK that benefits everybody,’ he told BBC Radio 4’s Today programme.
Mr Hollinrake also defended Mr Sunak over the disclosure that he continued to hold a US green card and to pay taxes in the US after becoming Chancellor.
‘He was working in the US at one point – to do that you need a green card to be able to do that – and then came to the UK and declared that position with the Cabinet Office,’ he said.
‘It doesn’t reduce his taxation in the UK at all. In fact with a green card you can often pay more tax. In terms of what was in Rishi’s mind at the time in terms of his status as a green card holder, you should probably sit down and ask Rishi that.’
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