“SUNLIGHT,” as David Cameron famously said in 2009 about the MPs’ expenses scandal, “is the best disinfectant”.

Now the sunlight is being shone on the tax affairs of Rishi Sunak’s household and it’s proving a rather uncomfortable time for the well-to-do Chancellor and his equally well-to-do wife, Akshata Murty; both of whom are multi-millionaires.

It has emerged that Murty is a non-domiciled UK resident, a non-dom, which means she is not required by law to pay UK taxes on her overseas income.

After days of political strife following the revelation, during which Sunak accused opponents of seeking to “smear” his wife and use the attacks on her as a “political hit job” on him, on Friday evening Murty announced she would pay UK taxes on all her worldwide income.

This was because she did not want her financial arrangements to be a “distraction” for her husband. Of course, it was too late; the political damage had already been done.

In a statement, Murty insisted she had done nothing wrong but acknowledged some people did not see her tax status as being compatible with her husband’s position.

“I understand and appreciate the British sense of fairness and I do not wish my tax status to be a distraction for my husband or to affect my family.” She added: “I do this because I want to, not because the rules require me to.”

It has been estimated Murty, a fashion designer and the daughter of an Indian billionaire, potentially saved up to £20m in UK tax through the arrangement.

She reportedly holds a 0.91% stake in Infosys, an IT business founded by her father, with shares said to be worth £700m. In the last year alone, she received £11.6m in dividends.

Non-dom status means she would not have to pay UK tax at a rate of 39.35% on dividends. India sets the rate for non-residents at 20% but this can fall to just 10% for those who are eligible to benefit from the UK’s tax treaty with India.

Questions have also been raised as to why she would use her Indian citizenship and a treaty with the UK dating back to the 1950s to avoid paying inheritance tax; a move which could, it’s been suggested, save her tens of millions of pounds.

Labour, naturally, jumped on the latest development swiftly, claiming Sunak and his family had potentially saved tens of millions of pounds in taxes through his wife’s non-dom status. It, along with the Liberal Democrats, called on Murty, who remains an Indian citizen, to pay the back taxes she had saved.

Of course, what she has done is not illegal. Non-dom status is meant to attract entrepreneurs to Britain, who don’t have to pay UK tax on their overseas earnings and will, hopefully, return the favour by creating lots of jobs and so help fill the Treasury coffers.

But what is surprising that when Murty’s non-dom status was revealed, neither she nor her husband seem to appreciate the political implications; the penny didn’t drop. Or, if it did, they foolishly thought they could get away with it.

Louise Haigh for Labour accepted Murty’s tax arrangement was legal but criticised Sunak for not being totally open about his family’s tax status at a time when he was raising taxes for millions of people.

“The Chancellor has not been transparent. He has come out on a number of occasions to try and muddy the waters around this and to obfuscate,” she declared.

Haigh accepted Murty’s non-dom status was legal but noted: “The question many people will be asking is whether it was ethical and whether it was right that the Chancellor of the Exchequer, whilst piling on 15 separate tax rises to the British public, was benefiting from a tax scheme that allowed his household to pay significantly less to the tune of potentially tens of millions of pounds less.”

Relatability is always an advantage for a leading politician. If voters believe that those in charge of the country get it and understand the struggles of everyday folk, then they’re more likely to vote for them.

After the spring Budget and the multi-millionaire Chancellor’s publicity stunt of filling up a car that wasn’t his and his seeming lack of knowledge about how to use a debit card at the petrol station till, Sunak again seems to have come across as someone not in touch with the everyday reality most people have to contend with.

This morning, Tory backbencher Kevin Hollinrake, a loyal Sunak ally, came to his defence and rejected suggestions the Chancellor’s leadership credentials had been damaged, pointing to his record of supporting the economy through the pandemic.

“That takes incredible skill and incredible judgment,” he told the BBC’s Today programme.

Hollinrake also denied Murty’s non-dom status was a “tax dodge,” saying it was a policy which had been supported by both Conservative and Labour governments.

“It is a deliberate policy to attract wealthy people from other countries around the world to the UK on the basis that they create jobs and create wealth in the UK that benefits everybody,” he argued.

While Sunak has publicly blamed Labour for the tax disclosures, some around him see the hand of Downing Street amid reports of renewed tensions between Boris Johnson and the man he put in charge of the nation’s finances.

On Friday at a joint news conference with German Chancellor Olaf Scholz, the PM was forced to deny claims his office was behind the briefing against the Chancellor.

With a straight face, he told reporters: “If there are such briefings, they are not coming from us in Number 10 and heaven knows where they are coming from.” Boris added: “Rishi is doing an absolutely outstanding job.”

In another twist to the saga, it also emerged the Chancellor, who lived and worked in the US, had an American Green Card that allowed him to live there permanently.

America’s inland revenue states that anyone who has a Green Card is treated as a “lawful permanent resident” and is considered a “US tax resident for US income tax purposes”.

Sunak’s spokeswoman explained the Chancellor continued to file US tax returns “but, specifically, as a non-resident; in full compliance with the law”.

She went on: “As required under US law and as advised, he continued to use his Green Card for travel purposes. Upon his first trip to the US in a Government capacity as Chancellor, he discussed the appropriate course of action with the US authorities. At that point, it was considered best to return his green card, which he did immediately.

“All laws and rules have been followed and full taxes have been paid where required in the duration he held his Green Card,” insisted the spokeswoman.

The whole episode has undoubtedly tarnished the hitherto squeaky clean and highly competent reputation Sunak had enjoyed. Only time will tell, if it has ended his chances of moving into Number 10.

No doubt, the Chancellor and his wife will be anxiously waiting for the Sunday papers to drop to see if there are any more revelations.

While Labour, the SNP and the Liberal Democrats will be raising a wry political smile at the self-inflicted woes of Sunak, perhaps the person with the biggest grin will be Liz Truss, the Foreign Secretary, regarded as a leading contender to succeed Boris.

If Rishi is no longer regarded as so dishy by party members, her Thatcheresque performance on the international stage over the war in Ukraine might convince the grassroots - who have the final say on who leads the Conservatives - that it’s time for another leaderene and another female PM in Downing St.