Angela Rayner has admitted underpaying Stamp Duty on an £800,000 seaside flat she purchased recently, opening up speculation that she may be forced to resign.

The Deputy Prime Minister, who is also Housing Secretary, told The Guardian she “deeply regretted the error”, which could put her position in jeopardy.

Her career look to be on shaky ground given that one of her own ministers, Rushanara Ali, was last month forced to resign after she evicted her tenants only to re-list the property at a signficantly higher rent soon afterwards.

Rayner had declared the flat in Hove, East Sussex, as her main residence even though she also has a family home in Ashton-Under-Lyne near Manchester, where her children live. It transpires this was put into trust in her son’s name.

The Stamp Duty bill on the flat could rise from £30,000 to £70,000 as she consults HMRC on how much is actually due and has referred herself to the Prime Minister’s adviser on ministers’ interests, Sir Laurie Magnus – who in effect will decide her future.

The issue of second homes is tricky for Rayner as the Government has given local councils powers to charge double council tax on such properties in areas where local people are unable to afford to buy.

I have subsequently sought further advice from a leading tax counsel

In a statement to The Guardian, Rayner said: “When purchasing the property my understanding, on advice from lawyers, was that my circumstances meant I was liable for the standard rate of Stamp Duty.

“However, given the recent allegations in the press I have subsequently sought further advice from a leading tax counsel to review that position and to ensure I am fully compliant with all tax provisions.

Deeply regret

“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. I am working with expert lawyers and with HMRC to resolve the matter and pay what is due.”

And she goes on to say: “I deeply regret the error that has been made. I am committed to resolving this matter fully and providing the transparency that public service demands. It is for that reason I have today referred myself to the independent adviser on ministerial standards”.

If Rayner was forced to resign it would be a major blow, as she has spearheaded the Government’s programme to build 1.5 million homes within five years and her department is in charge of getting the Renter’s Rights Bill over the line.

Industry reaction

Greg Tsuman, Managing Director for Lettings, Martyn Gerrard

“If the Secretary of State for Housing doesn’t know what she is supposed to owe in property taxes, how can anyone else be expected to?,” he says.

“This case exemplifies how byzantine the system for taxing property and income in this country has become.

“It is a shame that the Government is now investigating how it can add further charges and regulations, because there is already too much complexity.

“The result is cases like this, where rules are broken either because they’re too difficult to understand or they’re so onerous that it incentivises non-compliance.

“This comes less than a month after the Homelessness Minister was forced to resign after evicting tenants to hike the rent at one of her properties.

“There seems to be a systemic hypocrisy in this Government when it comes to housing

“There seems to be a systemic hypocrisy in this Government when it comes to housing. It is baffling that they’re doubling down on more taxes and tougher laws when the conduct of the Ministers in charge shows that they’re already unworkable.

“Perhaps the Government should look at ways to simplify and reduce these archaic property taxes and regulatory burden so that they’re easier to comply with. If that would help individuals like Ms Rayner to pay their dues, then perhaps the move could even increase revenues for the Treasury.”