Boris Johnson is facing demands for an investigation into Rishi Sunak after the chancellor admitted he held US residency for more than a year after taking charge of the UK’s finances.
A flustered Prime Minister tried to bat away questions about the chancellor amid a mounting crisis.
Sunak’s spokeswoman confirmed last night reports that the chancellor and his wife Akshata Murty held green cards, permitting US residence, until more than a year into his time in No.11
The official said: “As required under US law and as advised, I have continued to use his green card for travel purposes. Upon his first trip to the US in a Government capacity as Chancellor, he discussed the appropriate course of action with the US authorities.
“At that point it was considered best to return his green card, which he did immediately.
“All laws and rules have been followed and full taxes have been paid where required in the duration he held his green card.”
The development came in the wake of confirmation that Murty, the daughter of a billionaire who married the chancellor in 2009, holds non-dom status allowing her to avoid paying UK tax on international earnings.
The US inland revenue says anyone who has a green card is treated as a lawful permanent resident and is considered a “US tax resident for US income tax purposes”.
Ed Davey, the Lib Dem leader, asked: “How could the man who is responsible for UK tax policy regard any permanent residency status for the United States as acceptable?”
“This would be a huge conflict of interest and a serious breach of the ministerial code.”
Davey has written to cabinet secretary Simon Case and the independent adviser on ministers’ interests Lord Geidt, urging them to open an investigation.
At a joint press conference with Germany’s Chancellor Olaf Scholz the Prime Minister had to field repeated questions on what he knew about the couples’ tax status.
Johnson insisted Rishi Sunak had done “absolutely everything” required after it was reported he held a US green card for a period while Chancellor.
He said Sunak is doing an “absolutely outstanding job” but revealed he did not know about Murty’s tax status until it was made public.
Asked about Sunak having held a green card, he said: “As I understand it the chancellor has done everything he was required to do.”
The chancellor is already under fire for his wife’s non-dom status which avoids paying tax in the UK on profits made elsewhere.
Subak said his spouse Akshata Murty, who is estimated to be worth hundreds of millions of pounds, had done nothing wrong in choosing a financial arrangement that means she is not legally obliged to pay tax in Britain on foreign income.
Labor leader Keir Starmer said Sunak could be guilty of “breathtaking hypocrisy” if his wife was reducing her own tax bill as the chancellor increased national insurance for millions of Britons.
Sunak has blamed Labor for trying to “smear my wife to get at me” but it was reported that unnamed allies of the chancellor accused Johnson’s Downing Street of trying to cut down the chancellor who is seen as a rival for the Tory leadership.
Johnson strongly denied No 10 had been briefing against Sunak over his wife’s non-dom status.
The Prime Minister told reporters: “If there are such briefings they are not coming from us in No 10 and heaven knows where they are coming from,”
“I think that Rishi is doing an absolutely outstanding job.”
Murty, who is estimated to be worth hundreds of millions of pounds, has done nothing wrong legally by choosing the arrangement exempting her from paying tax in the UK on foreign income.
But Keir Starmer said Sunak must “come clean” about his family’s tax affairs following revelations about his wife’s tax-reducing non-domiciled status.
Speaking at the launch of Labour’s local election campaign in north London, the Labor leader said: “What the Chancellor needs to do is to just come clean.
He added: “At the moment, it looks to me very much like one rule for them and another rule for everybody else”.
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