UK Treasury chief fights to save reputation in tax storm

Britain’s Treasury chief is fighting to save his reputation by requesting an investigation of his own conduct after a series of news reports on his family’s finances raised questions about his judgment

Britain’s Treasury chief, once seen as a potential candidate for prime minister, is fighting to save his reputation by requesting an investigation of his own conduct after a series of news reports on his family’s finances raised questions about his judgment.

Rishi Sunak, a 41-year-old former hedge fund manager, asked Prime Minister Boris Johnson to direct his adviser on ministerial standards to review all of the disclosures Sunak has made — such as his wife's tax exemption status and her connection to a company that received government contracts — since he became a government minister.

Sunak said he was confident all “relevant information” was appropriately declared, but he wanted an investigation to reassure the public.

“My overriding concern is that the public retain confidence in the answers they are given, and I believe the best way of achieving this is to ensure those answers are entirely independent, without bias or favor,” Sunak wrote in a letter to Johnson dated Sunday.

Sunak’s standing has been damaged by revelations that his Indian-born wife took advantage of rules that allow many foreigners to escape U.K. taxes on their overseas income. It came at the same time he was raising income taxes for most residents already facing a cost-of-living crisis tied to soaring energy prices.

Sunak defended his wife after the first reports that she had opted for “non-domiciled” tax status, saying she is a private citizen with her own career and independent investments and shouldn’t be subject to the same level of scrutiny as a politician.

But by Friday, his wife, Akshata Murty, a fashion designer and the daughter of an Indian billionaire, said she didn’t want the issue to become a “distraction” for her husband so she had decided to pay U.K. taxes on her worldwide income.

Married people in the U.K. file separate tax returns, unlike in the U.S. where many file joint returns.

But the brouhaha hasn’t ended.

Angela Rayner, deputy leader of the opposition Labour Party, wrote to Johnson on Sunday asking that his ethics adviser investigate six issues relating to Sunak’s disclosures.

These include allegations that he failed to reveal his wife’s stake in Infosys, an information technology company that has won several contracts from the government, and concerns about the so-called blind trust Sunak established to allow him to maintain his holdings in an investment fund while giving up any role in their day-to-day management.

Steve Reed, Labour’s spokesman on justice issues, said Monday that he believes Sunak has violated government rules on ministerial conduct. Ministers sometimes resign if they break these rules.

“If the chancellor’s household is benefiting from contracts of that kind, that should have been something that he declared in the register of interests, but he didn’t,” Reed told the BBC. “There’s a whole list of areas where the chancellor appears to have failed to declare things he should have declared.”

Sunak’s Cabinet colleagues have defended him.

Environment Minister George Eustice rejected suggestions that Sunak was “too rich” to be chancellor of the exchequer or even potentially prime minister.

“I don’t think it’s right that we should have a rule that says you’re too wealthy to be able to do a role,” he told the BBC. “What matters is the knowledge, the technical expertise, that you have.”