Boris Johnson has suggested it is wrong to probe the non-dom status of Rishi Sunak’s wife, because families should be kept out of politics.
Quizzed about The Independent’s revelations that Akshata Murty is avoiding paying UK tax on her foreign earnings, the prime minister refused to comment on the controversy.
He told reporters: “I think it is very important in politics, if you possibly can, to try and keep people’s families out of it.”
Mr Johnson swerved the row, despite growing pressure for Ms Murty to explain her claim that she has non-dom status because she is an Indian citizen – widely criticised as misleading.
Keir Starmer stepped up Labour’s attack on the chancellor – pointing to the 15 tax rises Mr Sunak has introduced and calling the situation “breathtaking hypocrisy”.
The chancellor has declined to comment on the controversy, while a spokesperson for Ms Murty claimed she had to use non-dom status because of her Indian citizenship.
“Akshata Murty is a citizen of India, the country of her birth and parent’s home. India does not allow its citizens to hold the citizenship of another country simultaneously,” the spokesperson said:
“So, according to British law, Ms Murty is treated as non-domiciled for UK tax purposes. She has always and will continue to pay UK taxes on all her UK income.”
However, the explanation was ridiculed by tax experts – who pointed out that a person requests non-dom status, which is not granted automatically.
HMRC guidance states that a non-domiciled person can choose whether to pay UK tax on foreign income, or to claim “remittance basis”, allowing UK tax to be avoided.
Chris Bryant, a senior Labour MP, said of Ms Murty’s explanation: “This is just wrong. Non-dom status is not automatic and the Treasury needs to urgently clarify this inaccurate statement.
“This is a chancellor who just yesterday raised taxes on families who are struggling under the rising cost of living. The British public deserves to know how much he and his family have saved on their own tax bill.”
Earlier, the business secretary claimed Mr Sunak has been “very transparent” about his family’s financial affairs, despite his refusal to answer questions about his wife’s Russian “blood money” from a stake in the Indian tech firm Infosys.
Kwasi Kwarteng also argued that non-domiciled status has been “part of the UK tax system for more than 200 years”.
But the Labour leader demanded: “We need complete transparency on this so that we can all understand what schemes she may have been using to reduce her own tax.
“To use a scheme when the chancellor is out there, day after day, saying we need tax rises on millions of people in this country who are really, really struggling is breathtaking hypocrisy,” Sir Keir said.
