Rayner resigns: Legal advice excuse falls flat in tax duty scandal
Angela Rayner threw her lawyers under the bus over her brewing tax scandal, but the lawyers rebutted, citing the “arrows stuck” in their backs, as experts insisted she shouldn’t have hid “behind legal advice”.
When it emerged that Rayner had underpaid £40,000 in tax on her £800,000 property in Hove, it prompted calls for her to step down from her Deputy Prime Minister role, which she did on Friday.
At the time, she referred herself to Sir Laurie Magnus, the independent adviser on ministers’ interests, and issued a statement on Wednesday, directing blame at her lawyers for having provided inadequate advice.
In her lengthy statement, she said: “I acknowledge that due to my reliance on advice from lawyers which did not properly take account of these provisions, I did not pay the appropriate stamp duty at the time of the purchase.”
She did not name the lawyers, leading the press to try to find out who had issued the ‘bad’ advice.
UK firm Shoosmiths was named by the BBC as the firm that set up Rayner’s trust in 2020.
Following the report, the firm was flooded with requests, leading it to distance itself from her tax row.
Shoosmiths’ statement said: “We did not act for the Rt Hon Angela Rayner in relation to the purchase of her Hove property and/or the SDLT aspects of that property. Ms Rayner is not a current client of the firm and has not been for some time.”
Following this, it was reported by The Telegraph that Kent-based licensed conveyancers Verrico & Associates acted on the purchase of the seaside flat at the heart of her tax row.
Lawyers claim scapegoat
However, in their statement, the firm rebutted her claim, stating the family-run firm was made “scapegoats” for her scandal.
Managing director Joanna Verrico said: “We probably are being made scapegoats for all this, and I have got the arrows stuck in my back to show it.
“We are not an inexperienced firm, but we’re not qualified to give advice on trust and tax matters, and we advise clients to seek expert advice on these.”
Rayner’s statement has already led many in the public to believe she had received bad legal advice.
“The Independent reported that many of their readers were blaming the ‘poor legal advice’ in their comments section.
Adam Craggs, head of tax, investigations and financial crime at RPC, told City PM: “Although we do not know all of the facts, conveyancing solicitors would generally be expected to deal with straightforward matters relating to stamp duty land tax (SDLT), such as calculating the basic amount payable in respect of a property purchase.”
“Conveyancing solicitors do not generally present themselves as tax experts or provide detailed SDLT advice, and it would therefore be unusual for them to offer the type of SDLT advice said to be in question here,” he added.
Caroline Foulger, partner at Hunters Law, stated that “solicitors have to be very clear in their retainer as to what they are and are not advising on”, but added that “tax advice is an entirely separate area”.
She added that SDLT “is a complex area of tax” and surprisingly few practitioners specialise in this area.
James Vernor-Miles, head of the residential property at Hunters Law, said: “If Angela Rayner’s conveyancers only asked her ‘Do you own any other property’ and they got the answer ‘No’ then they gave reasonable advice about the amount of SDLT based on incomplete information.”
However, he added: “The simple truth about all this is that SDLT is as complicated as any other tax.”
City PM asked her office to clarify the conflicting information regarding who is responsible for the tax advice, and was advised to refer back to her statement, as this matter was with the independent advisor.
Robert Hines, partner at law firm Vardags, said: “Public figures cannot afford to hide behind legal advice. If they do, it must be expert and specialist advice, reflecting their position.”
“Without it, they risk speculation and harmful scrutiny, as the Angela Rayner case shows. Only specialist advice offers the shield against misinformation, lasting damage to reputations and financial harm,” he added.
James Kipping, partner at MHA, said: “The headlines this week are a powerful reminder of the importance of openly sharing the full story and all potentially relevant facts when seeking professional advice.”