Experts question why Angela Rayner avoided stamp duty penalty

The stamp duty scandal involving Angela Rayner has prompted questions from industry experts over how she was able to avoid a financial penalty.

Ms Rayner resigned as Deputy Prime Minister and Housing Secretary after admitting she failed to pay the correct amount of stamp duty on her flat in Hove.

However, last week Ms Rayner claimed she has been “exonerated by HMRC of deliberately avoiding tax” and does not need to pay a financial penalty.

Cleared of wrongdoing

As previously reported on Property118, the row over Ms Rayner’s stamp duty centred on allegations she “dodged” £40,000 on an £800,000 seaside flat in Hove, East Sussex, by declaring it her primary residence.

According to The Times, Ms Rayner removed her name from the deeds of her Greater Manchester home weeks before purchasing the Hove property, enabling her to pay £30,000 in stamp duty instead of the £70,000 that would have applied if the flat were a second home.

Ms Rayner claims HMRC has now cleared her of “any wrongdoing”, and that she has since paid the £40,000 in unpaid stamp duty but will not face a fine.

However, industry experts have questioned why HMRC let off Ms Rayner without a fine and how her case was resolved so quickly.

General public is seemingly being held to a higher standard than politicians

Sean Drury, of Blick Rothenberg,told The Times that Ms Rayner had been investigated over an error deemed to have arisen through carelessness, defined as a failure to take reasonable care, such as not paying sufficient attention or failing to follow proper procedures without any intention to mislead.

Penalties for such errors can range from 0 to 30% of the underpaid amount. However, HMRC concluded that Ms Rayner’s actions were neither careless nor deliberate.

Mr Drury said many taxpayers would not have received similar treatment.

He told The Times: “We are seeing taxpayers get in touch with HMRC and admit they got it wrong and are automatically being charged penalties.

“I’m not privy to the details, but I would say we have seen people fined for far less than Rayner. The general public is seemingly being held to a higher standard than politicians.”

He added: “The timeframes to get responses on these penalties is usually years with HMRC. We have seen businesses being wound up because they haven’t been issued tax refunds in a timely fashion, or had other issues resolved quickly.”

Extraordinary that HMRC had chosen not to fine Ms Rayner

Sean Randall, an independent stamp duty specialist, also described it as “extraordinary” that HMRC had chosen not to fine Ms Rayner for failing to pay the correct amount of tax.

He told The Times: “Penalties can be imposed in two scenarios, a deliberate error, which is akin to fraud, and a careless error, which is akin to negligence. It seemed to me that she was quite clearly careless. One conveyancing firm had warned she should seek specialist advice, and another had recommended it.

“They clearly had concerns that Rayner’s tax affairs may have been more complicated because of her circumstances and advised her to obtain tax advice accordingly.

“I think if you asked 100 people on the street, 99 would say she was careless in failing to heed those warnings. But ultimately, it is HMRC which decides. I find it extraordinary she has been found not to have acted carelessly.”

However, HMRC have declined to comment on Ms Rayner’s case, with a spokesperson telling the Telegraph it could not respond due to confidentiality laws.