Rishi Sunak has fired Tory party chairman Nadhim Zahawi following the series of allegations around his tax affairs.

Mr Zahawi, who had a seat in the Cabinet, paid a penalty to resolve a tax dispute during his brief stint as Chancellor.

In a letter to Mr Zahawi published this morning, the Prime Minister said it is “clear that there has been a serious breach of the ministerial code”.

In his response, Mr Zahawi made no attempt to apologise but took a swipe at the “fourth estate” – journalists – and the toll that news coverage had taken on his family. He said he would continue to support the government from the backbenches.

Pressure has mounted on Mr Zahawi after he released a statement to “clear up some of the confusion” over his tax affairs.

He said he had paid what HM Revenue & Customs said “was due” after it “disagreed about the exact allocation” of shares in the YouGov polling company he co-founded.

He insisted the error was “careless”, not deliberate, but he did not disclose the size of the settlement, said to be reported to be £4.8m, including a 30% penalty.

Under pressure to sack Mr Zahawi the Prime Minister asked his new ethics adviser Sir Laurie Magnus to assess whether the HMRC settlement amounted to a breach of the ministerial code.

In his letter to Mr Zahawi, Mr Sunak wrote: “Following the completion of the independent adviser’s investigation – the findings of which he has shared with us both – it is clear that there has been a serious breach of the ministerial code.

“As a result, I have informed you of my decision to remove you from your position in His Majesty’s Government.”

He also paid tribute to Mr Zahawi’s contribution as a minister, particularly during the pandemic.

Mr Zahawi should be ‘extremely proud’ of his ‘wide-ranging achievements’ in Government over the past five years, including his spell as vaccines minister during the Covid pandemic. 

“Your role was critical to ensuring our country came through this crisis and saved many lives,’ Mr Sunak said.

“And as the Conservative Party chairman, you have undertaken significant restructuring to Conservative Campaign Headquarters and readied us for important work in the coming months.”

Michael Gove, the Levelling Up Secretary, defended the Prime Minister’s delay in taking action, saying it was important to investigate these issues properly and not rush to judgement.

Bridget Phillipson, Shadow Education Secretary, said: “Nadhim Zahawi failed to pay the taxes he owed in this country and tried to silence those who spoke out about it.

“Despite the writing on the wall, the Prime Minister showed himself to be too weak to act. Rishi Sunak should have sacked Nadhim Zahawi a long time ago, just as he should have acted over Dominic Raab and Suella Braverman, but in his weakness he promoted them.

“The reason this keeps happening is we have a Government whose only principle is party first, country second. The Tories are governing in their own interests, with a Prime Minister who is trying to manage his MPs, rather than govern in the national interest.

“It’s vital that we now get answers to what Rishi Sunak knew and when did he know it. We need to see all the papers not just have the Prime Minister’s role in this brushed under the carpet.”

SNP Cabinet Office spokesperson Kirsty Blackman said: “Nadhim Zahawi should have been sacked well before now, but it has only been Rishi Sunak’s dithering and indecision that has kept him in post.

“The Prime Minister shouldn’t have needed an ethics adviser to tell him that a sitting Chancellor should not be in a tax dispute about millions of pounds of unpaid taxes.

“Sunak still has questions to answer over this whole affair about what he knew about the settlement and what advice he received about Zahawi’s tax on his appointment.”

Mr Zahawi was born in Baghdad in 1967 and educated at University College London.

He was co-founder of international Internet-based market research firm YouGov of which he was chief executive until February 2010. A chemical engineer in his earlier career, he was chief strategy officer for Gulf Keystone Petroleum until January 2018.

After the retirement of previous Conservative MP John Maples, he was elected for Stratford-upon-Avon at the 2010 general election.

He served in various ministerial positions and on 5 July last year Boris Johnson appointed him Chancellor of the Exchequer after the resignation of Mr Sunak. Less than 48 hours later, Mr Zahawi withdrew his support for Mr Johnson and publicly called on him to resign.

Mr Zahawi was a candidate to succeed Johnson in the Conservative Party leadership election, but was eliminated from the ballot after the first round of voting, and subsequently supported Liz Truss’s bid to become Conservative leader.

On his election to Downing Street, Mr Sunak appointed Mr Zahawi chairman of the Conservative Party on 25 October.

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