Angela Rayner faces ethics investigation over '£40,000 tax dodge' allegations

Ms Rayner, who also serves as Sir Keir Starmer's Housing Secretary, still insists that her old home remains her primary residence.

However, the Tories have now referred Ms Rayner to the Prime Minister's independent adviser on ministerial interests, accusing the Deputy Prime Minister of "hypocritical tax avoidance".

Sir Laurie, who earlier this year released a damning probe into then-Anti-Corruption Minister Tulip Siddiq, will decide whether to launch an investigation in the coming days.

In his letter to Sir Laurie, Tory Party Chairman Kevin Hollinrake wrote: “She is paying second homes council tax to Brighton & Hove council on a property that she tells HMRC is not a second home.

"This may be lawful, but it is inappropriate tax avoidance for a minister subject to higher standards of conduct.”

He continued: “As with the Prime Minister and Chancellor, she must pay the council tax bill personally.

“It is in this light that I believe the ministerial code has been breached, and her tax affairs are not in good order. This directly engages her conduct as a minister.”

Mr Hollinrake added: “Her wider behaviour as a minister is unethical and lacks integrity, and this necessitates a formal investigation of whether the ministerial code has been breached.

“If so, at the very least, an appropriate sanction could be to strip her of her ministerial residence.

“You will also want to consider whether the Deputy Prime Minister must now recuse herself from all policy matters relating to taxation on second homes, given her skin in the game.”

However, the Deputy Prime Minister's allies continue to insist that Ms Rayner has not done anything wrong.

A spokesman said: “The Deputy Prime Minister paid the relevant duty owing on the purchase of the Hove property in line with relevant requirements and entirely properly. Any suggestion otherwise is entirely without basis.”

Ms Rayner, who appears to have saved a whopping £40,000 by removing her name from the deeds of her house in Ashton-under-Lyne just weeks before purchasing the almost £800,000 seaside property, acted legally by avoiding a hefty £70,000 stamp duty charge.

However, the Deputy Prime Minister appears to have informed Tameside Council that her constituency home remains her primary residence for council tax purposes.

Brighton & Hove Council has also been told that her apartment is her second home.

Taxpayers have also been paying Ms Rayner's council tax bill for her grace-and-favour stay at Admiralty House in Whitehall.

The Cabinet Office has been footing the bill because Ms Rayner states that the apartment is not her primary residence.

However, Ms Rayner was last year accused of hypocrisy after The Mail on Sunday revealed she had made a £48,500 profit when she sold her ex-council house, having bought it using the right-to-buy policy she is now introducing restrictions on.

The Ashton-under-Lyne MP has also spoken out against tax avoidance since entering the House of Commons in 2015.

She previously said: “The public are furious with those who get away with tax avoidance while they pay.”

Ms Rayner even lamented Rishi Sunak over his extension of a stamp duty holiday on the first £500,000 of all property sales, describing the move as "a massive tax cut for wealthy second home owners and landlords".

In an attack against Jeremy Hunt in 2018, the Deputy Prime Minister also accused the then-Health Secretary of "exploiting [a] Tory tax loophole" by avoiding a £100,000 stamp duty charge.

While Downing Street tonight insisted that Sir Keir Starmer still had confidence in his deputy, a Labour MP appeared to admit that the fiasco was damaging.

A Labour MP told The Telegraph: “It really doesn’t look good. For ordinary people who are struggling, it doesn’t correspond to how people live their lives.”

Another said: “She really could have shut this all down by just being more transparent.”