Angela Rayner could now face yet another tax bill over the legal advice Labour paid for to examine her personal finances before her resignation last September. It’s a day ending in Y, so Angela Rayner’s tax affairs are back in the headlines…
The Times has revealed that Labour used party funds to hire Jonathan Peacock KC, a leading tax barrister, to examine whether Rayner had underpaid stamp duty on her £700,000 flat in Hove. Ethics adviser Sir Laurie Magnus wrote at the time that the advice she sought “covered her personal position in relation to council tax, stamp duty land tax, capital gains tax and inheritance tax”. Here we go again…
Under the Income Tax (Earnings and Pensions) Act 2003, employer-funded legal costs are usually only tax-exempt where they relate to liabilities or proceedings connected with the employee’s duties or office. Rayner’s advice concerned her personal property arrangements and had no connection to her parliamentary duties or her role within the party. If the payment is treated as a benefit provided by reason of her office as Deputy Leader of the party, HMRC would likely view that as a taxable benefit in kind on which she would owe income tax. This all happened within the current tax year, so if there’s tax owed, it wouldn’t need to be reported and paid yet. When the time comes, will the former ‘DPM’ open her purse? She should be used to this by now…
There are millions of taxpayers out there who would appreciate someone else picking up their accountancy bill without that being taxable. Sadly, that’s not how it works in the real world…
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