We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
Rishi Sunak’s bumper tax bill proves he’s the right man for the top job, a senior Tory insisted yesterday. The Prime Minister’s contributions of more than £1million over the last three years dwarfed those of Sir Keir Starmer. The Labour leader’s records show he paid nearly £120,000 in two years.
Former business secretary Jacob Rees-Mogg said Mr Sunak’s healthy earnings of £4.7million made him “the sort of person we want running our country”.
The Tory MP added: “I think it is really good news that you have somebody of the ability and wealth-creating enterprise of Rishi Sunak as our Prime Minister.
“I think the fact he has £5million of income is good news and should give us confidence in the calibre of people going into British politics.”
Sir Keir released his tax returns yesterday. They show he has paid £94,650 in income tax since 2020 and £23,930 in capital gains tax, following the sale of a house he helped his sister to buy.
He also announced he will scrap the tax benefits on his own pension if he wins power.
Sir Keir has already said he will reintroduce the lifetime allowance on pensions, abolished by Jeremy Hunt in last week’s Budget.
But under current legislation, the Labour leader would still be exempt from paying tax on pensions savings over £1million, thanks to a tax break he was granted by the Government when he became head of the Crown Prosecution Service.
Yesterday he said he will change the law to alter that too.
He said: “I am absolutely committed to changing what the Government did last week, which was to give a tax cut to the
wealthiest one percent.
“Let me go further than that. I don’t intend that to exclude me. And therefore, I haven’t taken advantage of this, there are no tax advantages, and nor do I want one.
“So when I reverse that change the Government put in law last week, I will be included within that, whatever change is needed within legislation or anything else.
“I am very happy, want to be, and will be in the same position as everyone else in this country.”
Sir Keir published his tax returns the day after Mr Sunak released his financial figures on Wednesday.
And the tax expert whose investigations brought down former Cabinet minister Nadhim Zahawi said the PM’s records showed there had been no tax avoidance.
But Dan Neidle said Mr Sunak was benefiting from a lower effective tax rate because most of his earnings came from capital gains rather than employment income.
Income tax on salaries is charged at a higher rate than on capital gains, which cover assets such as properties and shares.
The documents show the PM made £1.6million from capital gains in 2021/22 and £172,415 from dividends. For that same financial year, he paid £432,493 in tax – an effective rate of just 22 percent.
Sir Keir paid £118,580 in tax on earnings of £359,720 over the last two years, making his effective tax rate 33 percent.
But Mr Neidle said the PM had not “done anything clever”.
He explained: “It is because in this country we tax employment income at up to 47 percent, but capital gains on investments at only 20 percent.
“Whether that is a fair result, whether the law should be like that, is a very good question.
And, weirdly, Mr Sunak, who benefits from that low rate, is also the man who has the power to change it.”
During a visit to North Wales yesterday, Mr Sunak told reporters: “I said I would publish my tax returns. I was pleased to be able to do that …in the interest of transparency.”
His official spokesman said the documents showed the PM had paid a “considerable amount” in capital gains tax.
He added: “It is not unusual for savers to choose to put their investments in funds which focus on delivering long-term growth rather than short-term income generation.”
Most of Mr Sunak’s earnings related to a US-based investment fund listed as a blind trust.
Mr Neidle said it is designed to “avoid any conflict of interest”, meaning Mr Sunak will not see how his investments are being managed.
Political analyst and Tory peer Lord Hayward said it “doesn’t come as a surprise” that the Prime Minister “is a rich man”.
He added: “He married well. He has got a big income, but he has disclosed it. People have to judge it on that basis.”
Robert Palmer, executive director of campaign group Tax Justice UK, said: “It’s good to see politicians being more transparent about their tax affairs.
“But the revelations show they really need to get to grips with how wealth is taxed. Taxes on income from wealth are far lower than taxes on income from work.”
Source: Read Full Article