Personal Account

The real reason why Angela Rayner won’t reveal her tax affairs is that it would likely open a nasty can of worms for Labour

Angela Rayner just cannot seem to shake the whiff of scandal over her tax affairs. Labour’s deputy leader has repeatedly insisted that she did everything by the book when she sold her ex- council house in 2015. But there are many, many unanswered questions – and the answers can only be bad for Labour.

It appears that Ms Rayner did not pay any capital gains on the £48,500 profit she made on the sale of her Vicarage Road home in Stockport because she nominated it as her main residence to HMRC. Yet she married her then husband in 2010 and registered the birth of her two children at his address a mile down the road. Ms Rayner has also had to deny claims from Vicarage Road neighbours that it was her brother who lived in the house instead.

At the time of writing Ms Rayner has so far refused to publish her own tax return or the advice that she received over the property sale.

HMRC rules on private residence relief have long been bent, tax experts tell me. It is a common misconception that you can simply live in the property at any stage in order to claim it as your principal residence. How long Ms

Rayner lived in the property is crucial as capital gains tax relief is applied on a scale, so the longer you haven’t lived there, the more tax you owe.

What’s more, if you are married you can only have one principal residence for tax purposes between the two of you.

I’m told Ms Rayner may also have been entitled to “lettings relief ” of up to £40,000 which would have spared her a bill. Although she’d have had to have charged her brother rent and this would have to be declared on her tax return.

The tax advice Ms Rayner received could shed light on the matter, but equally it might clear nothing up. This story won’t go away as it represents a fundamental problem for Labour and its brand. And if Ms Rayner does publish her tax returns it will open a nasty can of worms for the party.

I suspect it would be fairly mundane stuff. The kind of thing financial advisers deal with every day.

The problem for Labour would be that it would draw attention to the fact that Ms Rayner likely has finances akin to what you’d expect a Tory voter to have. A stake in more than one property, a healthy salary, decent pension and sizeable savings.

The truth is that a little tax avoidance can simply be smart money management, although Ms Rayner denies breaking any rules to avoid tax. Most people “avoid” tax in some way or another. To pay the maximum we could would be foolish.

Yet to Labour, taxes are sacrosanct. After all they pay for our wonderful NHS, great schools and tip-top roads.

Paying anything less than your fair share is morally repugnant.

The capital gains bill in question may only have been £1,500, but that’s perhaps more income tax than many Labour voters pay in a year.

Ms Rayner has also previously called on a Tory candidate to publish their tax return – and as former Cabinet minister Sir Simon Clarke tweeted: “Hypocrisy is the worst of political sins.”

It may well turn out that Ms Rayner did things by the book, the problem for her party is that any form of tax trickery is just not a good look for a Labour MP.

‘The truth is that a little tax avoidance can simply be smart money management’