Call to quit

Tory chair Zahawi under pressure over tax affairs

Nadhim Zahawi
Nadhim Zahawi: penalty paid

Labour has raised further questions around Conservative party chairman Nadhim Zahawi’s tax affairs despite his apology for a “careless” error.

It was revealed that he paid a penalty to the tax office as part of a multi-million pound tax settlement, said to relate to a £4.8 million payment over the sale of shares in data analytics company YouGov which he co-founded.

Mr Zahawi was briefly Chancellor during last year’s Downing Street merry-go-round and had been tipped as a potential Prime Minister.

Today he broke his silence to say an error in his tax affairs was accepted by HMRC and said it had been “careless and not deliberate”.

Prime Minister Rishi Sunak was understood to be satisfied with Mr Zahawi’s account.

However, Labour party chair Anneliese Dodds said: “This carefully worded statement blows a hole in Nadhim Zahawi’s previous accounts of this murky affair. He must now publish all correspondence with HMRC so we can get the full picture.

“In the middle of the biggest cost-of-living crisis in a generation, the public will rightly be astonished that anyone could claim that failing to pay millions of pounds worth of tax is a simple matter of ‘carelessness’.  

“Nadhim Zahawi still needs to explain when he became aware of the investigation, and if he was Chancellor and in charge of our tax system at the time.

“He needs to explain why his legal representatives said his affairs were up to date in December last year only for him to settle a million pound fine this month. And he needs to explain why he was using threatening and intimidating legal action to shut down legitimate questions from tax experts last year.

“Rishi Sunak needs to remove Nadhim Zahawi as party chair and set the record straight immediately – including about what he knew about the investigation into Zahawi at the time.”

Earlier, Angela Rayner, deputy Labour leader, says Mr Zahawi’s position is now ‘untenable’ and has called for him to stand down.

She said: “The fact that Nadhim hasn’t been out on the airwaves explaining himself, to me adds insult to injury, especially given that he called this smears at the time and sent legal letters to those that asked questions legitimately about it.

“When you’re the chancellor, who is in charge of the tax affairs of the UK, and you’ve got a wealth of that nature, you would be expected to know about your tax affairs or to seek that advice at the time as opposed to not paying those taxes and having to pay a penalty notice.”

She added: “If he’s lied and misled the public and HMRC regarding his tax affairs then I think his position is untenable.”

Deputy Prime Minister Dominic Raab defended his Cabinet colleague, arguing that he should stay in his role as no remaining tax is due.

He said: “I can’t speak for the personal tax affairs of a colleague, but what I would say is that Nadhim has been very clear that he’s paid all the tax that he’s owed, that he’s paid it on time, that there’s nothing outstanding due, and I think that’s of course right and proper.”

Asked whether Mr Zahawi – who attends cabinet – should address the issue in Parliament, Mr Raab said: “That’s a matter for him.”

A spokesperson for Mr Zahawi told The Guardian: “Nadhim Zahawi does not recognise this amount… As he has previously stated, his taxes are properly declared and paid in the UK.”

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