Rishi Sunak takes Nadhim Zahawi ‘at his word’ over tax affairs

PM retains confidence in under-pressure Tory chair, says No 10 – as Sunak’s own tax returns set to be published ‘very short time’

A Home Office minister has insisted no evidence has emerged of “inappropriate behaviour” by former chancellor Nadhim Zahawi after he reportedly paid millions in tax to settle a dispute.

Questions have swirled around the Tory party chairman since the Sun on Sunday first reported that he agreed to pay a “seven-figure sum” to settle a dispute with HMRC.

It follows an investigation into the former Tory leadership hopeful’s financial affairs that was first revealed by The Independent last year.

This is how The Independent reported the investigation at the time (Independent)

Asked whether he knew of an investigation into the ex-chancellor at PMQs, Mr Sunak said Mr Zahawi “has already addressed this matter in full and there’s nothing more that I can add”.

A No 10 spokesperson later said the PM had full confidence in Mr Zahawi, and said Mr Sunak would publish his own tax returns in a “very short time”, after he promised to do so at the end of last year.

Asked whether Mr Sunak believes the matter of Mr Zahawi’s tax affairs is now closed, the PM’s press secretary said: “I don’t know whether the prime minister has reviewed it in full, but I do know that he takes Nadhim Zahawi at his word.”

Pushed on whether the PM will publish his tax returns as promised, the No 10 spokesperson said: “Yes, he said he would do it. We will do that in a very short time, in due course.”

Reports of a settlement are said to relate to an offshore company registered in Gibraltar to hold shares in the polling company he co-founded, YouGov.

The Independent reported in July that HMRC officials were examining the tax affairs of the senior Tory figure after an inquiry was launched by the National Crime Agency (NCA) in 2020.

The initial NCA inquiry was codenamed Operation Catalufa and is understood to have involved the agency’s International Corruption Unit.

YouGov’s 2009 annual report showed a more than 10 per cent shareholding by the Gibraltar-registered Balshore Investments Ltd. The report described the company as the “family trust of Nadhim Zahawi”, then an executive director of the polling firm.

But a representative for Mr Zahawi told the BBC: “Neither he nor his direct family are beneficiaries of Balshore Investments or any trust associated with it. Mr Zahawi has always said that he will answer any questions from HMRC, which he has always done.”

A spokesman for Mr Zahawi has said that his taxes are “properly declared” and that he “has never had to instruct any lawyers to deal with HMRC on his behalf”.

They added: “As he has previously stated, Mr Zahawi’s taxes are properly declared and paid in the UK. He is proud to have built a British business that has become successful around the world.”

Immigration minister Robert Jenrick said on Wednesday that it is a “private matter” for Mr Zahawi, arguing that the “important factor” is that Mr Zahawi’s tax affairs are now up to date.

“I think this is a private matter for Nadhim Zahawi,” Mr Jenrick told LBC radio. “Ministers have to declare their interests ... and I’m sure that Nadhim Zawhai has done that in the appropriate way. I think it’s very important that any minister maintains their tax affairs appropriately.”

He added: “The bar is obviously higher as a Treasury minister, but I’ve seen no evidence to suggest there has been any inappropriate behaviour by Mr Zahawi so I’d be careful about making allegations without the facts.”

Responding to reports of the settlement, Labour Party chairwoman Anneliese Dodds said: “If true, this is another nail in the coffin of the honesty, integrity and accountability promised by Rishi Sunak. This raises serious questions for both Nadhim Zahawi and the PM.”