Sunak paid £500,000 in taxes last year, according to his returns

According to tax returns released by Rishi Sunak, his income increased from approximately £2 million to £2.2 million.

Rishi Sunak disclosed his personal tax return for the previous year, which reveals he paid over £500,000 in UK tax on top of a £2.2 million increase in total income.

The public was presented with a summary of the prime minister’s financial affairs on Friday afternoon, during the break of parliament.

According to the document, his tax liability for the fiscal year 2022-23 was £508,308, which is approximately £75,000 higher than the amount he paid the year before.

In addition to capital gains of approximately £1.8 million (from £1.6 million in 2021/22), Mr. Sunak earned £293,407 in other interest and dividends.

Sunak’s Wealth and Tax Debate

The summary states that all investment income and capital gains originated from a blind trust investment fund based in the United States.

In addition, he amassed £139,477 through his positions as prime minister and member of parliament.

Despite amassing millions more in wealth, he paid the same effective tax rate as a teacher, according to his detractors.

This is due to the fact that the majority of his income was comprised of capital gains, which are taxed at a lower rate than income.

The document reveals that the Conservative leader’s total income increased by 13% from the previous year to £2.2 million, from nearly £2 million. 

His total revenues over the past four years now approach £7 million.

His annual income was subject to an approximate 23% aggregate tax rate; the disclosure of this information prompted demands for tax reform.

Calls for Equitable Tax Reform

Tax expert Dan Neidle remarked, “By employing such strategies, how was he able to pay a minimal amount of tax?” In the least, none. “The majority of that £2.3 million consists of capital gains, of which we impose a 20% tax on capital gains on shares.”

Robert Palmer, executive director of Tax Justice UK, stated, “At this time, people who derive the majority of their income from their wealth, such as the prime minister, pay a significantly lower tax rate than those who earn their living through employment. “This must be corrected to ensure that income from work and income from wealth are taxed at the same rate.”

Labour Member of Parliament Richard Burgon wrote on X: “Our tax system is designed to benefit the ultra-wealthy. It is time to make them pay their fair share!”

Mr. Sunak openly supported the 2016 reduction by the Conservative government of the highest rate of capital gains tax (CGT) from 28% to 20%.

At 45%, the highest rate of income tax, there have long been calls for a more equitable system.

Number 10 published “a summary” of Mr. Sunak’s UK taxable income, capital gains, and tax paid during the previous tax year, as reported to HM Revenue & Customs, instead of a complete tax return. It was compiled by Evelyn Partners, an accounting firm.

In addition, a summary of the prime minister’s tax affairs for 2021/22 was released in March of last year, revealing that he paid £432,493 in taxes during that period.

What motivated the release of the prime minister’s tax returns?

Mr. Sunak initially pledged to release his tax returns in the summer of 2022, during his unsuccessful campaign against Liz Truss for the position of Conservative leader.

Considered one of the wealthiest members of parliament, the prime minister has long been targeted with accusations of being “out of touch” due to the publicity surrounding his personal fortune.

The Sunday Times Rich List for 2023 estimates that Mr. Sunak and his wife, Akshata Murty, the progeny of the billionaire co-founder of Indian IT behemoth Infosys, possess a joint fortune of approximately £529 million.

Mr. Sunak began to feel financial pressure during his tenure as chancellor, when it came to light that Ms. Murty had non-dom status, which exempted her from paying UK tax on her foreign earnings.

Tax Disclosures Amid Controversy

In response to a significant backlash, Ms. Murty declared her intention to pay UK tax on her entire global income to prevent the issue from becoming a “distraction for her husband.”

The controversy surrounding Nadhim Zahawi, who was removed as chairman of the Conservative Party in January 2023 for failing to disclose millions of pounds in tax, increased the pressure on the prime minister to disclose his tax details.

Mr. Sunak, a former investment banker and hedge fund manager, has responded to critics of his immense wealth by asserting that he “earned everything I have through hard work” and that those who were using it as a “political smear” lacked patriotic aspirations.

In the 2022/2023 fiscal year, Chancellor Jeremy Hunt, whose tax summary was also published, paid a total of £117,418 in UK tax.

Before tax, his total income amounted to £416,608.

Leader of the Labour Party Sir Keir Starmer is expected to publish his tax return in the same manner as Mr. Sunak.

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