UK deputy PM Angela Rayner resigns over tax error

London: Britain's deputy prime minister Angela Rayner resigned on Friday after an investigation found she breached the ministerial code by underpaying on a property tax, in a major blow to Prime Minister Keir Starmer's embattled Labour government.

Rayner, a figurehead among the party's left-wing base, had earlier this week admitted not paying enough of a surcharge on the flat purchase and referred herself to the government's independent ethics adviser.

In a letter to Starmer, ethics chief Laurie Magnus wrote that Rayner had failed to "heed the caution" of legal advice she had received so he considered the "code to have been breached".

"I accept that I did not meet the highest standards," Rayner wrote in her resignation letter to Starmer, adding she would also be stepping down as housing minister and deputy leader of the Labour Party.

"I deeply regret my decision to not seek additional specialist tax advice," Rayner said, adding she took "full responsiblity for this error".

In his reply, Starmer told her he was "very sad" to lose her from government, but added: "You will remain a major figure in our party".

The resignation adds to the woes of his government, which has lurched from one storm to another since sweeping to power in July 2024 after 14 years in opposition.

It has been forced to U-turn on welfare reforms and fuel benefits for the elderly, while its failure to stop undocumented migrants arriving on small boats is fuelling support for hard-right firebrand Nigel Farage's Reform UK party.

It now lags well behind Reform in national polls, although the next general election is unlikely to occur before 2029.

Rayner disclosed on Wednesday that she had underpaid so-called stamp duty on a seaside flat in southern England following days of reports suggesting that she had saved £40,000 ($53,000) by removing her name from the deeds of another property.

'Complexity'

The 45-year-old has three sons, one of whom was born prematurely and is registered blind with lifelong special needs.

She said that after her 2023 divorce she sold her part of the family home to a trust fund set up for her son in order to secure the specially-adapted house for her child's future. She then used the money to help buy the £800,000-flat in Hove.

Rayner paid less of the property surcharge because she claimed the flat was her main home rather than a second home. But she later conceded this was wrong since her son is under 18 and therefore she was deemed to still have an interest in the house.

Magnus said the rules "entailed a considerable degree of complexity" and recognised that Rayner had twice been advised that the lower rate of stamp duty was applicable.

That advice, however, was qualified by the admission that it did not constitute expert tax advice. Rayner's failure to seek further guidance meant she "cannot be considered to have met the highest possible standards of proper conduct", said Magnus.

Rayner had often been tipped to become Labour leader one day and has been a top target for political attacks by the Conservatives and right-wing media.

She left school with no qualifications after becoming pregnant aged 16, and has a straight-talking style that has proved popular with working-class voters.

She grew up in Stockport on the outskirts of Manchester in northwest England, living in one of the area's most deprived social housing complexes.