Angela Rayner is expected to leave government following an investigation into her tax affairs by Sir Keir Starmer’s independent standards adviser, it is understood.
The Prime Minister received the report by ethics watchdog Sir Laurie Magnus on Wednesday morning.
Ms Rayner has faced mounting pressure to stand down over recent days after admitting she underpaid stamp duty on a flat she bought in Hove earlier this year.
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Ms Rayner, who is also the Housing Secretary, paid £40,000 less on the property than she should have, as she claimed it was her main home rather than a second home.
In his report, Sir Laurie found that Ms Rayner “did not heed the caution” in legal advice she received when buying her Hove flat.
The independent ethics adviser said in his letter to the Prime Minister: “She believed that she relied on the legal advice she had received, but unfortunately did not heed the caution contained within it, which acknowledged that it did not constitute expert tax advice and which suggested that expert advice be sought.
“I am conscious of the acute challenges ministers face – perhaps uniquely – in managing the demands of their personal lives and their public responsibilities.
“However, the responsibility of any taxpayer for reporting their tax returns and settling their liabilities rests ultimately with themselves.”
He said Ms Rayner’s actions failed to meet the “highest possible standards of proper conduct” over her failure to pay the correct level of stamp duty.
He said she had “acted with integrity and with a dedicated and exemplary commitment to public service”, but concluded she breached the ministerial code over her tax affairs.
Sir Laurie said that on the basis of the advice she had received from her lawyers, Ms Rayner believed that the lower rate of stamp duty would be applicable on the Hove flat purchase and was twice informed in writing that this was the case.
But in both instances that advice was qualified by the acknowledgement that it did not constitute expert tax advice and was accompanied by a suggestion, or in one case a recommendation, that specific tax advice be obtained – something she did not do until after the media pressure on her over the flat.
Sir Laurie said her “unfortunate failure” to pay the correct stamp duty coupled with the fact that this was established “only following intensive public scrutiny” led him to conclude she had not met the highest possible standards.
The word “b***” along with a much larger sign saying “tax evader!” were daubed on a white wall on the outside of her Hove property yesterday (September 4).
Across the road, “Tax evader Rayner” and “Rayner tax avoidance” were graffitied on construction chipboard.
The matter is being treated as criminal damage by Sussex Police, who are making enquiries.
Peter Kyle, MP for Hove and Portslade, said he was “disappointed” by the vandalism.
Mr Kyle told The Argus: “I’m really disappointed that the heritage wall has been defaced over this issue.
“Hove is better than this. There are many, many ways people can express their anger and disappointment in Angela Rayner, including reporting her to the Commissioner for Standards.
“But defacing a wall is not one of those ways.”
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