15 ways Rishi Sunak hiked tax while his family avoided it

Rishi Sunak has found himself at the heart of a tax avoidance row just as he increases contributions for normal people across the country.

Last week details of his family’s tax affairs were leaked to the press, showing that his wife, the Indian billionaire Akshata Murty, was claiming non-domicile (or “non-dom”) status, meaning she did not have to pay UK taxes on income she earned elsewhere.

The row erupted the same week Sunak implemented the so-called health and social care levy, increasing national insurance payments for millions of workers by 10 per cent, while critics accused him of announcing too little to help low-income households with the cost of living crisis.

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It’s one of up to 15 tax rises, freezes and scrapped reductions the chancellor has introduced during his time in government, Labour opposition said, accusing him and his family of avoiding paying tens of millions in taxes.

This government’s tax rises over the past two years amount to two per cent of GDP – an overall hike which took 10 years under Tony Blair and Gordon Brown – worth around £46bn, the Institute for Fiscal Studies said.

Sources also revealed that Rishi Sunak held a US green card – declaring himself a permanent US resident – for tax purposes for six years as an MP and for 19 months once in the chancellor post.

While none of the family’s arrangements were illegal, Murty caved to mounting pressure and agreed to pay UK taxes on her global income for the last tax year and going forward, while Sunak wrote to the prime minister requesting an investigation into his own affairs.

The scandal made headlines the same week the cost of living crisis ramped up for millions of households across the UK, with campaigners warning more will be forced to choose between heating and eating in the months to come as they grapple with economic decisions made by Sunak and the Treasury.

Labour accused the chancellor of hypocrisy for his family’s tax avoidance while piling pressure on families and businesses through more than a dozen tax hikes, stalls or scrapped reductions in just two years.

The tax rises Rishi Sunak introduced in his first two years as chancellor include:

• Previously-promised corporation tax cut – from 19 per cent to 17 per cent – cancelled
• Council tax increase of two per cent
• Reduction on the lifetime limit on entrepreneurs’ relief for capital gains tax from £10m to £1m, meaning those who sell a business will pay full tax on anything above £1m profit
• Another corporation tax increase, from 19 per cent to 25 per cent
• A freeze on personal allowance for income tax at £12,570
• Inheritance tax threshold frozen at £325,000 until 2025/26
• A freeze on the annual exempt allowance on capital gains tax at £12,300 for individuals
• VAT registration threshold for businesses frozen at £85,000, meaning a real-terms reduction in the taxable turnover a business must have before paying VAT
• National insurance increase, or “health and social care levy”, of 1.25 percentage points
• Dividend tax increase by 1.4 per cent, meaning shareholders keep less of the money they receive from companies
• Freeze in starting rate band for savings tax at £37,700, meaning more people will have to pay higher tax on their savings
• Freeze on £20,000 adult ISA subscription limit
• Income tax basis period reform, bringing forward the date by which some businesses need to pay tax
• Another council tax increase of six per cent
• A freeze on £27,295 the student loan repayment threshold

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In his Spring Statement, Sunak said the threshold for paying national insurance would increase by £3,000, and pledged to cut the basic rate of income tax from 20 per cent to 19 per cent in the pound – by 2024.

The chancellor has repeatedly pledged to take a “low tax, high growth” approach to the country’s finances. But Pat McFadden, Labour’s shadow chief secretary to the Treasury, said “working families feel more insecure than ever” after Rishi Sunak’s national insurance increase, which would “reduce living standards and harm our economy”.

The Liberal Democrats are reportedly drafting legislation, to be tabled when MPs return to the Commons after Easter, which would compel all ministers to disclose whether they or their spouses claim non-dom status and if they have stakes in overseas tax havens.