British Indians have rallied around Chancellor Rishi Sunak and his Indian wife, Akshata Murty, amid a barrage of criticism over the latter’s legal tax status.
Indian diaspora groups and entrepreneurs condemned the attacks on Sunak and his family as politically motivated, misogynistic and prejudiced, with racist undertones.
Friends of India Society (FISI) UK said: “Akshata Murty, a proud Indian citizen, has followed the laws of the land she is residing in.
“Her non-domiciled status is as per a provision available in the UK. She has commitments in India including her ageing parents – this vilified attack on her looks prejudiced and is uncalled for!”
Author and entrepreneur Alpesh Patel OBE said he is furious at the notion that Indians can be expected to pay tax on Indian earnings in the UK and said the fact that the Indian in question is currently living at 11 Downing Street is definitely a factor behind the attacks on the Chancellor’s family.
Patel said: “I think for the vast majority of people it’s about No. 1 sexism: ‘tell the little woman to do as she’s told’. No. 2 racism: ‘why can’t we still have Indian tax from India on Indian earnings? An Indian living in Downing Street, when a nice British white family could be.’ No. 3 envy: hatred of anyone with any money. No. 4 is to do with hatred of anything Conservative Party.
“And for 0.1 per cent it’s about the Income and Corporation Taxes Acts. Britain doesn’t have the right to tax Indian income since 1947. That’s why I’m angry. Some people still think they can tell Indians to pay tax to Britain on Indian earnings in India.”
"It is hard for the press to praise the Chancellor for saving businesses and families in difficult times," said Lord Rami Ranger CBE.
Manoj Ladwa, Founder & CEO of India Inc. Group, said: “The politically motivated attacks on Akshata Murty are disgusting, misogynistic and smack of racism of a bygone era.
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“Not the Global Britain – fair and open that we cherish. Yes, she’s a businesswoman and her husband happens to be Chancellor – get over it!”
Murty is the daughter of Narayana Murthy, the co-founder of India’s leading software services major Infosys, and owns around 0.93 per cent of the company. Her non-domicile status emerged in the media this week, which means Murty is not legally bound to pay tax in the UK on income earned overseas, in this case India – where she would pay tax on her Indian profits.
The entrepreneur’s spokesperson said in a statement: "Akshata Murty is a citizen of India, the country of her birth and parent's home.
"India does not allow its citizens to hold the citizenship of another country simultaneously. She has always and will continue to pay UK taxes on all her UK income."
British Prime Minister Boris Johnson said it is important in politics “to try and keep people's families out of it”.
Sunak himself told ‘The Sun’ that it was awful that his wife and in-laws were being smeared to get at him.
He said: “She loves her country. Like I love mine, I would never dream of giving up my British citizenship. And I imagine most people wouldn’t.
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“I appreciate that in the past British people were trying to use this thing to basically not pay any tax in the UK... But that’s not the case here. She’s not a British citizen. She’s from another country. She’s from India.
“That’s where her family is… that’s where she, you know, ultimately will want to go and look after her parents as they get older. She pays full UK tax on every penny that she earns here in the same way that she pays full international tax on every penny that she earns internationally, say, in India.”
A non-domiciled classification is available to British residents who register their “domicile” – the centre of their personal and financial interests – as outside the United Kingdom. The rules were reformed a few years ago by the Tory government, which set a 15-year time limit on a British resident being classed as non-dom for tax purposes. Under British law, Murty – a director at venture capital firm Catamaran UK who has lived in the UK for nine years – would be automatically deemed domiciled in the UK after 15 years. Tax experts told iGlobal that British taxpayers are in for an effective “windfall” at the end of those 15 years, with money that would subsidise schools and hospitals in the UK from wealth creation in India.
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However, the Opposition Labour Party has unleashed a barrage of criticism over her tax status, saying Sunak had "very serious questions to answer" about his family's finances. The government has sought to dismiss the attacks, given that Murty is not a politician and all financial matters had been declared by her Cabinet minister husband. A person familiar with the situation said the UK government and the Treasury department had been aware of the situation.
Sunak has come under pressure in recent weeks after his Spring Budget last month was seen as not going far enough to tackle the rising cost of living crisis amid soaring energy and fuel prices amid the knock-on impacts of the Covid-19 pandemic and the Russia-Ukraine conflict. The British Indian finance minister has insisted that he has put in measures to help the poorest and said his job was to make the “right long-term decisions” and avoid “excessive amount of borrowing”. He has also sought to highlight several tax cuts he has factored in for smaller businesses, such as the Employment Allowance.
(With Reuters inputs)