Defence Secretary failed to pay council tax on London home blaming 'administrative error'

Mr Healey, who is required to pay the new second-home council tax surcharge introduced in April, should have been charged £2,938 for the year on the property he uses while working in London.

But he paid only half that amount, with the shortfall only rectified on Thursday after he was approached by The Telegraph.

A spokesman for the Cabinet minister said the underpayment stemmed from the local authority, claiming “an administrative error” meant Westminster City Council “failed to classify his home correctly for council tax purposes, leading to an incorrect council tax notice being issued”.

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They insisted Mr Healey had “fulfilled all his obligations as a tenant by notifying Westminster council of the second home status of the tenancy on the council tax registration form when the tenancy began”, and confirmed the outstanding amount had now been paid in full.

But Conservative figures say the explanation raises further questions - including why the Defence Secretary did not alert the council to the underpayment when he received the “incorrect” bill.

A fresh row over ministers’ personal finances has erupted just days before Rachel Reeves is expected to target property wealth in her Budget next week.

Ms Reeves is understood to be weighing up new council tax charges for the most expensive homes, or even an annual “mansion tax”, as part of a wider shake-up of property taxation.

Kevin Hollinrake, the Conservative Party chairman, said: “Whether it’s the anti-corruption minister being investigated for corruption, the homelessness minister who evicted her own tenants, or the housing secretary who failed to pay her stamp duty, with this Government it is one rule for them and another for everyone else.

“And now we learn the Defence Secretary underpaid his council tax and only settled it after a Telegraph investigation. This comes as the Labour Government is hiking council tax bills for everyone else across the country.

“Healey needs to come clean about what he knew and when. If we cannot trust senior ministers to keep their own tax affairs in order, how can we trust them to run the country?”

Laila Cunningham of Reform UK said: “As a Westminster councillor, I see residents chased for far smaller sums. Yet a Cabinet minister underpays thousands and only fixes it when journalists ring.

"It’s the same old story, the people in charge don’t live under the rules they impose on everyone else.”

This comes after Ms Reeves admitted last month that she had let out her south London home without the required licence, blaming her letting agents for the oversight.

Angela Rayner was forced to resign as deputy prime minister in September after it emerged she failed to pay a £40,000 stamp duty bill on a flat in Hove.

Rushanara Ali stepped down as homelessness minister in August after she was accused of evicting her tenants before re-listing her property at a higher rent. In her resignation letter, she insisted she had followed “all relevant legal requirements,” but accepted she had become a distraction for the Government.

Tulip Siddiq also resigned as anti-corruption minister in January, following a ruling from Sir Keir Starmer’s ethics adviser that she had inadvertently misled the public about her links to the political party led by her aunt, Sheikh Hasina, the former prime minister of Bangladesh. She denies allegations of corruption.

Mr Healey, who owns his main home in Rawmarsh and Conisbrough where he lives with his wife, began renting a flat in Westminster last November. It is understood the property is used for work purposes and that he notified Westminster council of its second-home status when the tenancy started.

Sources say he ticked the relevant box declaring it a second home — but Westminster council failed to classify it as such, issuing an incorrect bill as a result.

Allies of the Defence Secretary say he has now paid what he owed “in good faith” once the error was identified, though he has not apologised.

Mr Healey claims parliamentary expenses to cover the cost of renting the flat, meaning he is eligible to recoup council tax and utilities.

Sources close to him indicated he is likely to claim the additional £1,469 of underpaid council tax through the MPs’ expenses system.

A spokesperson for Secretary of State for Defence, John Healey, told LBC:

“The Secretary of State fulfilled all his obligations as a tenant by notifying Westminster Council of the second home status of the tenancy on the council tax registration form when the tenancy began.”

“Westminster Council made an administrative error which failed to classify it as a second home for council tax purposes, and led to an incorrect council tax notice being issued. The Council have accepted fault and apologised for the error”.

“Westminster Council have rectified this mistake and the council tax liability, including the second homes surcharge, on the London flat has been paid in full.”