Angela Rayner has resigned from the government after an ethics inquiry found she breached the ministerial code by underpaying stamp duty on an £800,000 flat (€936,000) in Hove. Sir Laurie Magnus, the independent adviser on ministerial standards, said she acted in good faith but did not heed a caution within the legal advice that recommended seeking specialist tax guidance. She had paid about £40,000 less stamp duty than required in May (€46,800) and referred herself to the standards watchdog.

The resignation comes as the prime minister begins a wider reshuffle. Commons Leader Lucy Powell was among those dismissed, and Scotland Secretary Ian Murray is understood to have been sacked as part of the changes. Rayner, who has served as deputy prime minister, housing secretary and deputy Labour leader, had been central to Labour’s housing pledges and the expansion of workers’ rights; the shake-up follows a difficult summer for the government.

Rayner said in a letter to the prime minister that she deeply regrets not seeking additional specialist tax advice and accepted responsibility for the error. Magnus stated she acted in good faith, but stressed that the responsibility for reporting and settling tax liabilities rests with the individual. The prime minister said Rayner would remain a major figure in the party and continue to champion the causes she cares about. The conveyancer blamed by Rayner denied providing tax advice on the purchase, and Labour now faces the task of selecting a new deputy leader, who may not automatically take the role of deputy prime minister.