Angela Rayner is battling for her political survival after she admitted underpaying stamp duty on her £800,000 seaside flat and referred herself to the ministerial ethics adviser after days of denials of wrongdoing.

The deputy prime minister confirmed her tax arrangements after coming under intense pressure to be more transparent about her properties, but has been left with her reputation damaged and future hanging in the balance.

Keir Starmer immediately threw his weight behind Rayner, but faced criticism after Downing Street refused to say when he had been told about her situation. Government sources suggested the ethics inquiry could be completed within days.

The controversy comes as the prime minister faces a turbulent autumn, with tax rises expected to be announced in the 26 November budget, which will arrive against a difficult economic backdrop.

Rayner, who is also the housing secretary, has faced charges of hypocrisy as tax rises could include those on property. She has also previously called for wealth taxes to help ease the UK’s strained public finances, including targeting people who used companies to avoid stamp duty.

After referring herself to the ethics adviser, Sir Laurie Magnus, Rayner said she had received inaccurate legal advice that led her to underpay stamp duty. She confirmed she will have to pay more as a result of incorrectly paying the lower rate on the flat in Hove, East Sussex. Experts have said the bill could run to as much as an extra £40,000.

In a highly personal statement to the Guardian, she said she “deeply regretted” that the error had been made, after classifying the flat as her only property, despite spending much of her time with her children at the family house in Ashton-under-Lyne, Greater Manchester.

Rayner’s fate, as deputy prime minister and as a cabinet minister, could come down to whether she can prove that she was given the wrong advice by her lawyers, as she has claimed, when she bought the Hove flat in May.

In an early sign of support for Rayner, Starmer told MPs he was “very proud to sit alongside” her in the Commons. The prime minister, who patted her shoulder when he arrived for PMQs, said referring herself was the “right thing to do”.

“She has explained her personal circumstances in detail. She has gone over and above in setting out the details, including asking the court to lift a confidentiality order in relation to her own son,” he added.

“I know from speaking at length to the deputy prime minister just how difficult that decision was for her and her family, but she did it. She did it to ensure that all information is in the public domain.”

But his spokesperson refused to say when Rayner received new advice that she had underpaid. No 10 also declined to confirm when Starmer was told. As recently as Monday, he said she was the victim of “people briefing against her and talking her down over and over again”.

Starmer has a track record of ruthlessness when it comes to firing errant ministers, but while Rayner faces a moment of great uncertainty, she could yet be protected by her relatively powerful position within the Labour party, as a standard bearer of the left and working-class voice.

Months before the purchase of her Hove flat, Rayner had put her stake in her constituency home in Ashton into a trust, which was originally set up in 2020 to manage a payment to one of her sons, who, after a “deeply personal and distressing incident” as a premature baby, had been left with lifelong disabilities.

In May 2025, when she bought the south coast property, she said she was advised by lawyers over the level of stamp duty required. Subsequently, tax experts had told her that the flat could not be treated as her only residence because of the provisions of the trust.

Tax experts say that, even though she gave up her financial stake in the Ashton house after her divorce, Rayner would be regarded as still owning it if she or her children were a beneficiary under the trust and entitled to occupy the dwelling for life.

As the flat was an additional dwelling, she would be expected to pay the higher stamp duty rate of £70,000, rather than the £30,000 she actually paid. She is now working with HM Revenue and Customs to establish exactly how much extra tax is owed.

Regardless of ownership, the Ashton property remains her family home and where she is registered for most official and financial purposes, including council tax and the electoral roll. It is where her children live full-time, while she and her former husband take turns living at the house.

In her statement, 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.

“I have now been advised that although I did not own any other property at the time of the purchase, the application of complex deeming provisions which relate to my son’s trust gives rise to additional stamp duty liabilities.

“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”.

While Starmer awaits the ethics adviser’s conclusions, he will face pressure over Rayner’s position. Kemi Badenoch, the Conservative party leader, said: “If he had a backbone he would sack her.” The Tories published multiple old tweets from Rayner in opposition decrying “one rule for them, one rule for everybody else”.

The Reform UK deputy leader, Richard Tice, said: “She was so vocal in attacking opposing politicians when she was in opposition that she can’t stand up and say: ‘I’m the biggest hypocrite in the land.’ She has to offer her resignation.”

However, Rayner received unexpected support from Ed Davey, the Liberal Democrat leader, who refused to join the chorus of critics calling for her to go. “Obviously if the ethics adviser says Angela Rayner has broken the rules, her position may well become untenable,” he said.

“But as a parent of a disabled child, I know the thing my wife and I worry most about is our son’s care after we have gone, so I can completely understand and trust that the deputy prime minister was thinking about the same thing here.”

In her statement, Rayner added: “While I do not find it easy to publicly discuss personal and sometimes distressing family matters, I have always taken my responsibility as an MP and deputy prime minister seriously and tried to be as open as possible while protecting my family.

“To address the allegations made against me, I have now taken the difficult decision to explain why my arrangements are as they are.”

Downing Street had revealed on Monday that Rayner was prevented from publicising all of the details about her property ownership by a court order. In the interests of transparency, she applied to the court and was given permission to discuss them publicly on Tuesday night.