Tories fear the Sunak tax row will hurt the party in local elections

Conservative MPs on Monday expressed concern that a row over Chancellor Rishi Sunak’s family’s tax affairs could hurt the Tories in local elections on May 5.

Sunak has come under fire after it was revealed his wife enjoyed UK tax breaks afterwards Securing non-domicile status in the UK, and that he held a US Green Card, which put him on a potential path to American citizenship. Health Minister Sajid Javid, who succeeded Sunak as chancellor, has also admitted he had non-dom status before entering politics.

Several senior Tories privately criticized Sunak’s handling of the dispute over his wife’s tax status, saying it was likely to hurt the party the local elections. Conservatives are already bracing for losses amid the cost of living crisis and revelations about Downing Street parties taking place during the Covid-19 lockdown.

One minister said May 5 was “already going to be bad, but there is no doubt that a chancellor who looks like he is dodging taxes in his own budget is making it worse”.

Another member of the government added: “Everyone is primarily concerned about the local elections and the rishi stuff is making our situation worse. People are already concerned about the cost of living and party gates, but this has given Labor another opportunity to kick us.”

Some Tories have questioned whether the controversy over the Sunak family’s tax affairs will undermine the chancellor’s ambitions to succeed Johnson as party leader.

A Conservative MP said: “The local elections [in May] It’s going to be terrible, but at least that way they have someone to blame. Time will tell if [Sunak] can actually survive it all.”

Another Tory MP criticized Sunak’s handling of the controversy, saying: “I loathe the idea of ​​dragging political spouses into the political fray, but non-dom status and a green card and being chancellor clearly doesn’t work. What was he thinking?

Downing Street said on Monday Boris Johnson had approved Sunak’s request that Lord Christopher Geidt, the government’s independent adviser on ministerial standards, investigate whether the chancellor has correctly declared all his interests since his tenure as minister.

Number 10 added that the PM has full confidence in Sunak, who said on Sunday he had always played by the rules.

Sunak’s wife, Akshata Murty, announced last week that she would pay UK tax on all of her worldwide earnings after she was revealed to be a non-Dom.

By being a nondom, Murty, who holds Indian citizenship, was eligible not to pay UK taxes on her global income. She owns a stake in Indian tech company Infosys valued at more than £500m and received £11.6m in dividend income last year.

The dispute over the Sunak family’s tax affairs dealt the chancellor a second political blow in quick succession: he was criticized for it last month no longer in his spring statement Helping Brits deal with the cost of living crisis.

Rishi Sunak and his wife Akshata Murthy at Lord's Cricket Ground in London in August 2021.

Rishi Sunak and his wife Akshata Murthy at Lord’s Cricket Ground in London in August 2021. © Zac Goodwin/PA

Asked if he was out of touch with the British public, Sunak said on Monday: “In terms of the cost of living, I know it’s difficult for people. . . I want to make sure we can do whatever it takes and I can do whatever it takes to get through the challenging months ahead.

Union leader Sir Keir Starmer tried to contrast the ministers’ behavior with the plight of ordinary families struggling with the tight cost of living. “It’s really one rule for them and another for everyone else,” he said.

Starmer called on Downing Street to clarify the tax status of all ministers and their spouses.

Number 10 could not say on Monday if other ministers had non-Dom spouses. MPs are not allowed to be non-doms under UK law.

Sunak and his wife said last week that any taxes due in the UK have been paid by them. The chancellor, who worked in the US before entering politics and lives in California, surrendered his green card in October last year after consultation with American authorities.

Labor, meanwhile, raised questions about whether Sunak, as chancellor, oversaw any tax changes that benefited people of non-Dom status.

The law firm of Vinson & Elkins claimed that a tax rule in the February Treasury Act could potentially benefit non-doms.

But the Treasury said the program was only available to fund managers and not individuals.

Labor also questioned whether Sunak had reported a potential conflict of interest and when the future fund He was appointed Chancellor during the pandemic to support start-ups and provided a £650,000 convertible loan to Mrs Wordsmith, an education company.

Catamaran Ventures, an investment company controlled by Murty, was a minority shareholder of Mrs Wordsmith, which collapsed less than six months after receiving the loan.

Sunak said on Sunday he was confident that Geidt’s review would show that “all relevant information has been adequately declared”. Tories fear the Sunak tax row will hurt the party in local elections

Adam Bradshaw

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