Rishi Sunak is facing a huge backlash after casually dismissing a £3billion loophole for the rich as "this non-dom thing".
At PMQs, Keir Starmer urged the PM to scrap his "beloved non-dom status" - a special tax status that Mr Sunak's wife has benefited from.
The PM flippantly described Labour's attack on the tax status as "this non-dom thing" - which has now caused massive outrage.
Shadow Chancellor Rachel Reeves said Mr Sunak's casual phrasing showed "how little he appreciates the enormous tax burden he has put on working people", as she accused him of making a "political choice" not to scrap the status.
A scandal erupted last year after it emerged the PM's mega-rich wife Akshata Murthy, whose family business is estimated to be worth around £3.5billion, was registered as non-domicile in the UK.
The non-dom status means an individual only has to pay tax on money earned in the UK but not on foreign income.
The classification is not illegal and can save an individual from paying UK tax on income from dividends from foreign investments, rental payments on property overseas or bank interest.
It sparked outrage especially as Mr Sunak - who was then-Chancellor - had just raised taxes for working people across the country though a 1.25% National Insurance hike.
In a fiery PMQs exchange, Mr Starmer accused the multi-millionaire PM of being "so out of touch" as he blasted his failure not to have scrapped the non-dom status.
The Labour leader said: "It's not just his refusal to take any responsibility for the damage they've done, the crashed economy, the hit to living standards, it's also he refuses to take the action that's needed.
"He could stop the handouts he's giving to oil and gas giants.
"He could scrap his beloved non-dom status.
"He could put that money back in the hands of working people and get the NHS back on its feet, that's what a Labour government would do, why doesn't he?"
Mr Sunak replied: "The record is clear, look at it right now. Record numbers of people in work. Inequality now lower, the number of people in poverty lower. Those in low pay, the lowest numbers on record.
"He talks about this non-dom thing, I think he's already spent the money that he claims he'd raise on five different things because it's the same old Labour Party.
"They're always running out of other people's money."
Mr Starmer responded: "He calls it 'this non-dom thing', let's be honest about what his refusal to scrap the non-dom status means.
"It means that at every possible opportunity he has voted to put taxes up on working people while at the same time taking every possible opportunity to protect a tax avoidance scheme that helped his own finances."
The PM responded by highlighting the Labour leader's pension arrangements as a former chief prosecutor, telling MPs: "The rank hypocrisy of it, as we saw last week when it comes to his own special pensions scheme.
"I said it last week, but I will say it again, it is literally one law for him and a tax rise for everybody else."
Mr Starmer replied: "Here's the difference, I would scrap his pension giveaway whether it affected me or not.
"He refuses to scrap the non-dom status that benefits him and his family."
Echoing the Prime Minister's words, he added: "I can see why he is attracted to this 'non-dom thing'."
Shadow Chancellor Rachel said: “The PM referring to the £3billion non dom tax status loophole as 'this non dom thing' shows just how little he appreciates the enormous tax burden he has put on working people while some of the very wealthiest get out of paying their fair share.
“Labour believes that if you live here you should pay your taxes here, and that’s why we would scrap the non dom tax status and instead invest in the next generation of doctors and nurses for our NHS.
“It’s a political choice by the Prime Minister to keep this loophole in place instead of using the money for our NHS. Labour will always be on the side of working people.”
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