Pressure is growing on Rishi Sunak and his wife to come clean on details of their tax affairs after The Independent revealed she uses controversial tax-avoiding non-dom status.
Opposition parties joined forces to demand the chancellor end his silence on why Akshata Murty pays no UK tax on her huge foreign earnings – saving her many millions of pounds, it is believed.
Tax lawyers also dismissed Ms Murty’s claim that her non-dom status is a consequence of her Indian citizenship, pointing out that she has chosen to adopt it.
Condemning “breathtaking hypocrisy”, Keir Starmer called for answers about “what schemes she may have been using to reduce her own tax,’ a demand echoed by the Liberal Democrats and Scottish National Party.
Ministers attempted a fightback, condemning what one called “malicious attacks” on a private citizen, while another accused Labour of believing “wives are merely an extension of their husbands”.
Boris Johnson ducked questions about the controversy, arguing: “I think it is very important in politics if you possibly can to try and keep people’s families out of it.”
Labour sent 12 detailed questions to Mr Sunak, demanding he come clean about how much tax his wife has avoided – and whether the chancellor has gained personally.
Mr Sunak was urged to open up about whether Ms Murty uses the “remittance basis” to claim non-dom status and avoid UK tax on foreign income, as experts suggested.
This would confirm it is an “active choice”, Labour said, which has also demanded to know if she pays tax in India – or in a tax haven, to minimise her bills.
The chancellor was also told to set out what measures are in place to “ensure you are not involved in Treasury discussions around potential amendments to the non-domicile status rules?”
“As chancellor it is crucial you both follow the rules and lead by example,” said the letter, penned by James Murray, a Labour Treasury spokesman.
Christine Jardine, the Lib Dem Treasury spokesperson, said of Mr Sunak: “It would be a scandal if his household were to have benefitted from overseas tax havens.”
And Kirsten Oswald, the SNP deputy Westminster leader, said: “There are a whole host of questions the chancellor must now answer, including exactly how much he and his family have benefitted.”
Ms Murty, the daughter of an Indian billionaire, holds investments in a range of companies, including a 0.93 stake in the tech firm Infosys which is thought to have paid dividends of around £11.6m in the past year.
As a non-dom, she could have avoided a tax bill of around £4.4m, before any tax liabilities overseas – in return for paying an annual £30,000 charge in this country.
Ms Murty’s spokesperson has not disputed that she has opted for “remittance basis”, in acknowledging that she pays only foreign tax on her foreign earnings. The spokesperson has also declined to disclose whether she is domiciled for tax purposes in India, or takes advantage of tax havens.
The Treasury said Mr Sunak declared his wife’s tax status to the Cabinet Office when he became a minister in 2018, and to his current department when he joined it, initially as chief secretary a year later.
Two senior Treasury officials and an additional official who often works with the department, said that they had not been informed of the chancellor’s potential conflict of interest arising to his immediate family’s use of non-dom tax status.
They believe that it was directly relevant to policy currently being developed around how best to attract foreign talent to the UK, and in other areas of international tax. They added that it was also relevant to policy for international trade in tax advice as part of professional and financial services.