Rishi Sunak saved more than £300,000 in tax due to a cut he voted for in 2016, says the lawyer whose investigation led to the sacking of Nadhim Zahawi as Conservative Party chairman.
The tax summary produced by Mr Sunak on Wednesday showed that he paid more than £1m in tax over the last three years at an effective tax rate of 22 per cent.
However, Dan Neidle, the tax lawyer whose investigation into Mr Zahawi’s tax arrangements led to the sacking of the former chancellor, believes Mr Sunak would have paid £308,167 more had the top rate of capital gains tax (CGT) not been cut by the Conservative government nine years ago.
As a result of the treatment of CGT by HMRC from 2016, Mr Sunak paid a tax rate similar to what a nurse would pay in income tax.
Mr Neidle told i: “Mr Sunak has benefited from the same low rate of tax on capital gains that we all would, if we’re lucky enough to make a gain selling shares.
“So, it’s not about him. It’s about a tax system that treats different types of income differently, for no very good reason, in a way that benefits the wealthy. Nigel Lawson equalised the rates of income and capital gains tax in 1988. Moving away from that was a mistake.”
In 2016, the Tory government cut that top rate of CGT back down to 20 per cent, a move Mr Sunak supported.
Backing the move in the House of Commons, Mr Sunak said: “I am confident that reducing capital gains tax rates – together with a brand new 10 per cent rate for long-term investments in private businesses – will unlock millions in much-needed funding.
“From speaking with investors this past week, it is clear that those policies have cut through and generated a fresh wave of enthusiasm for investing in British companies.”
Mr Sunak first said he would publish his tax returns during his unsuccessful campaign against Liz Truss to become Tory leader last year.
He faced calls to be transparent about his finances after it emerged his wife, Akshata Murty, had non-dom status. Around the same time, Mr Sunak admitted he had held a US green card, allowing permanent residence in that country – while he was chancellor.
He returned the green card in October 2021, ahead of his first trip to the US as a UK government minister.
The tax lawyer who uncovered the tax affairs of Nadhim Zahawi that led to his sacking by Mr Sunak does not believe there is anything of “particular interest” in the PM’s tax figures, but did question the tax system that allowed him to pay lower tax rate than many millions in the country pay.
Tax experts have also pointed out that despite continuing to state that he has made his tax return public, Mr Sunak has actually produced a “carefully crafted” tax position from his accountants.
Nimesh Shah, chief executive of tax and advisory firm Blick Rothenberg, said: “What’s interesting for me is it’s a very controlled way of releasing his tax information without actually sending out tax returns.
“If you just send out the returns themselves it’s open to interpretation from people like me and professionals. What he’s done is to set out the numbers and the numbers are the numbers, they’re facts. They’re not actually that interesting.”