Angela Rayner should have been fined by HMRC for underpaying stamp duty on her property in Hove, a whistleblower has claimed. The individual, said to have worked in HMRC's Fraud Investigation Service, reportedly voiced their concern over the handling of the Labour MP's case.

It emerged on Thursday (May 14) that Ms Rayner settled £40,000 in unpaid stamp duty, but has not paid any penalty as a result of an investigation into her underpayment of the levy on a property purchase. The row led to her resignation from the Government, and had overshadowed her prospects of a potential leadership run. The whistleblower said a penalty can be imposed for a "careless" error, a deliberate error or a deliberate error which is subsequently concealed.

They told the Mail on Sunday that Ms Rayner said she was found not to have deliberately avoided the tax, and did not dispute that.

The source added: "On the known facts, the error was not deliberate - it was careless." They added that HMRC would ordinarily levy a fine in cases of carelessness, but suspend it, conditional upon future "good behaviour".

They said it raises the question as to why HMRC agreed Ms Rayner took reasonable care.

A spokesman for Ms Rayner she had not received a penalty, either suspended or otherwise.

Her lawyer, Graham Aaronson KC said new facts had come to light which meant she would not be issued with a penalty.

The MP for Ashton-under-Lyne, earlier told the Guardian the investigation into her underpayment of stamp duty had "clipped her wings".

Ms Rayner's being cleared of deliberate wrongdoing in the investigation over her tax affairs paved the way for a potential leadership bid amid uncertainty over Prime Minister Sir Keir Starmer’s future.

The PM’s former deputy did not rule out running in any Labour leadership race, but said she would not trigger a contest.

Ms Rayner has been approached for comment in relation to the whistleblower's comments.

Their concern came in the same week Reform UK leader Nigel Farage insisted there was no connection between a £5million gift from billionaire donor Christopher Harborne and a £1.4million property he bought soon after.

Mr Farage is facing an investigation by the Commons watchdog over the gift from Mr Harborne. Reform UK's leader has previously insisted there is “no case to answer” over the gift.

A Reform UK spokesperson told the Press Association both the offer and property purchase process commenced before the gift from Mr Harborne.

Commenting on X, Mr Farage said: "This is fake news by the establishment media who will do anything to hurt Reform as we challenge their cosy consensus."