With discussions of Boris Johnson’s future as Prime Minister swept from the news agenda courtesy of the conflict in Ukraine, the spotlight has instead laid to rest on his supposed heir apparent.
Rishi Sunak originally came under fire for a fairly unsympathetic Budget back in March, at a time when the cost of living has increased to levels hitherto unseen in the modern era.
And now the focus has fallen on the ‘non dom’ status of his wife Akshata, who at the time her husband has increased taxes on the electorate has. It emerged, been able to wriggle out of a tax bill of some £2 million herself.
With the furlough handouts now a distant memory, has the sheen gone from the Conservatives’ former golden boy?
What Does Non Dom Mean?
In essence, when somebody takes up non-domiciliary – non dom – status in the UK, it means that they don’t have to pay tax on income and other gains from overseas unless they then bring that money into a UK bank account.
The controversy in the case of Akshata Murty is that, to qualify for non dom status, the individual’s permanent residence has to be outside of the UK – and they have to prove that to HMRC.
The non dom ‘scheme’ is particularly interesting as those who claim it become tax exempt in their domicile country too – meaning that it can be a rather tidy little earner.
More than 40% of people that earn £5 million or more in the UK have filed for non dom status since 1997, and those known to have benefited from the loophole include actors, bankers and Premier League footballers and club owners….as well as the wives of high-profile politicians.
The Sunak View
Murty has a considerable bank balance on account of her family’s I.T. empire that spans from India to the United States, and her estimated net worth is a cool £500 million.
As a non dom, she doesn’t have to pay tax on her 0.9% stake in Infosys, which The Guardian has calculated means she hasn’t lost a penny of the £54.5 million that she has raked in from the firm.
Incidentally, if Murty hadn’t claimed non dom status, she would have been liable for tax in the region of £20 million.
There is nothing illegal about what Murty has done, although it’s pretty easy to raise an argument that it’s a touch hypocritical given her husband’s fondness for sneaking tax increases on the UK public under the radar.
As if all that attention wasn’t unwanted enough for Sunak, it has now been reported that Infosys are continuing to operate in Russia – they hadn’t enforced any sanctions on the oligarchs that take advantage of their services until seven days ago.
Next Prime Minister Betting Odds Shift
When he’s not dodging awkward questions about his wife’s tax status, Sunak is appearing in disastrous photoshoots and committing ill-conceived PR gaffes.
For the past few years, Sunak has seemed to be the most likely successor to Boris in 10 Downing Street, and that ascension looked to have been accelerated in the midst of ‘party gate’ and Johnson’s continued flirtation with ‘misinformation’ and an chronic unwillingness to admit his (many) faults.
But the mistakes that Sunak is making are becoming increasingly prevalent, which is surprising given how smooth an operator he has been since taking the chancellor’s job in 2020.
There have even been rumours that Downing Street PR chiefs have been briefing against him – something denied by Boris himself, but if his previous invincibility continues to be tarnished then it won’t be long before he is gently elbowed out of the way as the Tories groom their next leader.
Interestingly, the betting markets have already begun to take heed. The Next Conservative Leader category has seen Sunak eased out to 7/1 and Liz Truss, the Foreign Secretary, nudged in to the same price – suggesting a battle will be waged once Boris has fallen on his sword.
The Next Prime Minister betting has also seen a change – Sunak has been lengthened to 8/1, while Keir Starmer has seen his position strengthened at 6/1….the polls are suggesting that Labour might just be winning back the hearts and minds of the voters that deserted them in droves at the last General Election.