Rishi Sunak today ordered an investigation into Nadhim Zahawi and admitted to “answering questions” about his tax affairs.
The Prime Minister has asked his standards advisers to look into the situation after it emerged he had paid millions of pounds last summer to settle a dispute with HMRC when he was chancellor.
Mr Zahawi’s allies insist he has no intention of stopping, stressing that the tax authorities accepted the error was ‘careless’ rather than intentional, and that he chose to pay the full amount requested rather than to negotiate. Downing Street has so far expressed confidence in the senior minister.
The row doesn’t seem to be abating, however, with Labor labeling Mr Zahawi’s position as ‘untenable’ and senior Conservatives suggesting he will have more questions to answer.
A Find Out Now survey conducted over the weekend found that 59 percent thought Rishi Sunak should fire him. Only 14 percent said it should stay on, while 28 percent weren’t sure.
Mr Zahawi shouted a cheerful ‘morning’ to waiting reporters and photographers as he arrived at Tory headquarters in Westminster today.
Nadhim Zahawi shouted a cheerful ‘morning’ to waiting reporters and photographers as he arrived at Tory HQ in Westminster today
A Find Out Now survey conducted over the weekend found that 59 per cent thought Rishi Sunak should fire Mr Zahawi. Only 14 percent said it should stay on, while 28 percent weren’t sure
Downing Street has expressed confidence in the senior minister from Rishi Sunak (pictured).
Mr Zahawi admitted on Saturday that he had refunded money to the taxpayer after making a mistake – although he did not address allegations that he had to pay back a whopping £4.8 million, including a large fine for his shareholding in polling firm YouGov.
He denied allegations that he had evaded tax by using a Gibraltar-registered offshore company to hold shares in YouGov.
Former minister Tim Loughton told BBC Radio 4’s Westminster Hour last night: ‘I think it’s fair to let him (Mr Zahawi) have his say and put forward his side of the matter. It would only have been more useful if he had done that more fully sooner.’
Mr Loughton added: ‘I don’t know whether Nadhim has done anything unwise or inappropriate.
“He certainly didn’t do anything illegal from the sound of it, or there would be more implications.
“If there is more to this then he will absolutely have to stand up and face the consequences and the Prime Minister will, I am sure, take the appropriate action.
“But at the moment we don’t know the whole story yet.”
Other Tories, including former party leader Iain Duncan Smith, have warned that Zahawi should share more information.
Cookham’s Lord Young told Times Radio: “I think Nadhim needs to be more transparent about exactly what happened or the story just isn’t going to go away.”
He added: “Normally a minister, especially one who is as well off as Nadhim clearly has, would have some very professional, reputable accountants handling all his tax matters, to make sure you don’t get into trouble that we are. to see.’
Mr Zahawi took no founder shares when he founded YouGov, saying in his statement on Saturday that his father took shares “in exchange for some capital and his invaluable guidance”.
He continued: “Twenty-one years later, when I was appointed Chancellor of the Treasury, questions arose about my tax affairs. I discussed this with the cabinet at the time.
‘After discussions with HMRC, they agreed that my father was entitled to founder shares in YouGov, although they disagreed on the exact allocation. They concluded that this was a “careless and unintentional” mistake.
“In order to focus on my life as a civil servant, I chose to settle the matter and pay what they said was due, which was the right thing to do.”
HMRC agreed that it had never set up an offshore structure, including Balshore Investments, “and that I am not the beneficiary of Balshore Investments,” Mr Zahawi said.
He added that the case had been resolved and all his tax affairs were “up to date” when he was appointed Chairman of the Conservative Party by Mr Sunak in October.
Sources stressed there was no ‘negotiation’ with HMRC, and Mr Zahawi was merely ordering his accountants to pay what the tax authorities asked to settle the matter.
The Sun on Sunday said Mr Zahawi – founder of polling firm YouGov – had been proposed for a knighthood in the recent honors trial but was not on the final list.
A source close to the former vaccines minister said: “Nadhim is very proud to have led the global vaccine rollout in the UK and reopened schools during Omicron.
“And it was the honor of his life to coordinate Her Majesty’s funeral in the Cabinet. He did those things to serve the country he loves and that’s reward enough.”
A Westminster source familiar with the process told MailOnline: ‘These faceless apparatchiks reward themselves with every honor under the sun in an instant.
But when someone leads the state’s only two successes in recent hearings, in vaccines and Her Majesty’s funeral, some pen-pusher decides to block recognition of true achievement over a technical accounting point. It’s embarrassing.’
Despite the growing controversy, his cabinet colleague James Cleverly insisted yesterday that he would not be fired.
Mr Zahawi is said to have made a payment to the tax authorities – reportedly well into the seven figures – while Chancellor at the end of Boris Johnson’s reign
Asked if Mr Zahawi would survive to questions from the prime minister on Wednesday, the foreign minister told Sky News: “Yes, being a very, very effective minister, he has shown himself to be a successful businessman before he entered politics.’ But Mr Cleverly was mocked for claiming in a separate interview that he did not know the details of Mr Zahawi’s situation because he had ‘shopped’ the previous day.
A former HMRC First Permanent Secretary said the taxpayer had a traffic light system in place to warn the government of any potential risks of awarding a knighthood to someone with tax problems. Sir Edward Troup told the BBC: ‘They don’t decide whether to award the honors or the peerage, but they give the information to those who make the decision, who make their own judgment.’
There are increasing calls for ministers to publish their tax returns, as is customary for presidential candidates in the US.
But Mr Cleverly said, ‘People’s taxes are private matters. I know that we as politicians, rightly so, expect a higher level of disclosure than other people.’