Deputy PM Rainer
British government shaken by flat tax controversy, Deputy PM Rainer resigns

Keir Starmer’s second-in-command, Angela Rayner, has stepped down as the UK deputy prime minister, housing secretary, and deputy Labour leader after admitting to underpaying stamp duty on a property purchase. Her resignation follows an independent probe that found she breached the ministerial code. “I take full responsibility for this error,” she stated in her resignation letter to Prime Minister Keir Starmer.

Rayner’s exit comes in the wake of an independent investigation which concluded she failed to act on legal advice when buying a flat in Hove. The report found that she ignored repeated guidance to seek expert tax counsel, thereby breaching the ministerial code. Rayner admitted to underpaying stamp duty and referred herself to the government’s ethics adviser amid mounting pressure and media scrutiny. She reportedly avoided around £40,000 in tax by removing her name from another property’s deed.

In her defense, Rayner mentioned that her legal team had not fully accounted for her personal circumstances, including a trust fund set up for her disabled son. Despite this, two separate law firms had warned her to seek specialist tax advice, with one explicitly recommending it.

Prime Minister Keir Starmer expressed his sadness at her departure but affirmed that Rayner had made the right decision. “I have nothing but admiration for you and huge respect for your achievements in politics,” Starmer wrote in a handwritten letter, signed off “with very best wishes and with real sadness.”

Earlier this week, Starmer defended Rayner in Parliament, stating that he was “proud to sit alongside” her and praised her transparency. However, tax experts indicated that Rayner will “almost certainly” face a fine for “carelessness.”

Rayner has served as Labour MP for Ashton-under-Lyne since 2015 and was elected deputy Labour leader in 2020. Following Labour’s general election win last year, she was appointed deputy PM and housing secretary.

Radhika Goyal is Author of Taxconcept Gurugram head office, for deeply reported tax, gst and income tax articles on issues that matter. He splits her time between New Delhi and Bengaluru, and has worked...