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Tag: Nadhim

  • Rishi Sunak fires minister Nadhim Zahawi after tax investigation

    Rishi Sunak fires minister Nadhim Zahawi after tax investigation

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    Rishi Sunak has fired Conservative Party chairman Nadhim Zahawi over a “serious breach” of U.K. government ethics rules relating to his tax affairs.

    Zahawi has been hit by weeks of damaging headlines over an investigation into his personal taxes carried out by HM Revenue and Customs.

    The party chairman and Cabinet Office minister was hit by a penalty from the tax authority while serving as a senior minister, with media reports putting the total charge at £4.8 million. An independent probe, ordered by Sunak and published Sunday morning, concluded Zahawi had not been sufficiently transparent about his private dealings with the tax authority when accepting a succession of senior ministerial roles.

    In a letter to Zahawi confirming his sacking, Sunak said he had vowed to put “integrity, professionalism and accountability at every level” of his administration, and that the investigation by the government’s ethics watchdog Laurie Magnus had found “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,” Sunak said.

    No.10 also published Magnus’ letter to Sunak, setting out the findings of his short investigation. The ethics chief said that while Zahawi had “provided his full and open cooperation” with his own inquiry, he had shown “insufficient regard” for the ministerial code, and in particular, its requirement to be “honest, open and an exemplary leader.”

    Zahawi had, Magnus concluded, failed to declare the HMRC investigation when he became Boris Johnson’s chancellor in July last year; failed to update his declaration of ministerial interests when he settled with HMRC last September; and failed to disclose the nature of the HMRC probe and penalty when Sunak was forming his own government in October 2022, “including to Cabinet Office officials who support that process.”

    “Without knowledge of that information, the Cabinet Office was not in a position to inform the appointing Prime Minister,” Magnus concluded.

    Zahawi hits out at press

    In his reply to the prime minister, Zahawi — who served as U.K. vaccines minister as Johnson’s government vied to get COVID-19 under control — said it had been, “after being blessed with my loving family, the privilege of my life to serve in successive governments and make what I believe to have been a tangible difference to the country I love.”

    Zahawi’s own letter made no mention whatsoever of his tax affairs and instead attacked the media, saying he is “concerned” about “the conduct from some of the fourth estate in recent weeks.”

    “In a week when a Member of Parliament was physically assaulted, I fail to see how one headline on this issue ‘The Noose Tightens’ reflects legitimate scrutiny of public officials,” he said, referring to the front page of the Independent newspaper, whose reporting helped bring the tax investigation to light.

    The sacking was seized on by the opposition Labour Party, with Shadow Education Secretary Bridget Phillipson arguing that Sunak had taken too long to act, and is a prime minister “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,” she added. “We need to see all the papers, not just have the prime minister’s role in this brushed under the carpet.”

    This developing story is being updated.



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    ( With inputs from : www.politico.eu )

  • Nadhim Zahawi fights for his political life after admitting tax ‘error’

    Nadhim Zahawi fights for his political life after admitting tax ‘error’

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    Nadhim Zahawi was battling to save his political career on Saturday night after he finally admitted reaching a tax settlement with HM Revenue and Customs (HMRC) following an “error” over a controversial multimillion-pound shareholding in the polling company YouGov.

    In a carefully worded statement, Zahawi appeared to confirm that HMRC had carried out an investigation into his financial affairs while he was serving as chancellor last summer. Zahawi, now the Tory party chairman, said that the tax authority had concluded that he had made a “careless but not deliberate” error.

    “So that I could focus on my life as a public servant, I chose to settle the matter and pay what they said was due, which was the right thing to do,” he stated. Tax experts said the statement was a tacit acknowledgment that Zahawi had paid a penalty.

    The admission raises questions for Rishi Sunak over what he knew about the settlement and when. It comes with the prime minister already under pressure after being fined for not wearing a seatbelt, with MPs also unhappy over his rejection of tax cuts and the government’s allocation of levelling up funds. In an attempt to protect Sunak, Zahawi added: “When I was appointed by the prime minister, all my tax affairs were up to date.”

    Zahawi’s tax affairs were thrown into the spotlight last summer when he was appointed chancellor by Boris Johnson, the day before Johnson was forced to resign. The Observer reported that civil servants in the Cabinet Office’s propriety and ethics team had alerted Johnson to an HMRC “flag” over Zahawi before his appointment, but it had been ignored.

    Zahawi faced scrutiny on a tranche of shares in YouGov, the polling company he co-founded, which were held by a Gibraltar company, Balshore Investments, and sold for about £27m between 2006 and 2018. It was estimated by the thinktank Tax Policy Associates he may have avoided £3.7m capital gains tax on the sale of these shares.

    Saturday’s statement immediately set off new demands for Britain’s most senior civil servant and parliament’s standards commissioner to launch separate investigations into the affair, after questions over whether Zahawi has made the correct declarations to officials and parliament concerning his financial interests.

    Zahawi has still not disclosed the size of the HMRC settlement or confirmed he paid a penalty. It follows a Guardian report that he paid about £5m in relation to the sale of shares in YouGov.

    Unlike his YouGov co-founder, Stephan Shakespeare, Zahawi took no shares in YouGov. However, a 42.5% shareholding was held by Balshore Investments, an offshore trust controlled by Zahawi’s parents. As YouGov grew in value, Balshore sold all the shares by 2018.

    Zahawi said his father took shares “in exchange for some capital and his invaluable guidance”. He added that while HMRC agreed that his father was entitled to shares, it “disagreed about the exact allocation. They concluded that this was a ‘careless and not deliberate’ error.”

    Zahawi said HMRC had agreed he had never set up an offshore structure, including Balshore Investments, and that “I am not the beneficiary of Balshore Investments”. When asked on Saturday night, his team would not comment on whether he had ever benefited from Balshore Investments in the past.

    Dan Neidle, a tax lawyer and founder of Tax Policy Associates, said: “When I first reported this, he denied it, threatened to sue me and said throughout his tax affairs were in order. It is a disgrace.”

    Opposition parties are now demanding the publication of all of Zahawi’s correspondence with HMRC. They are also calling for independent investigations into whether Zahawi made the necessary declarations to officials and parliament.

    Simon Case, the cabinet secretary, is facing calls to oversee an investigation into whether Zahawi should have declared any links relating to YouGov or Balshore under the ministerial code. The Liberal Democrats’ deputy leader, Daisy Cooper, has written to Case, calling for his intervention.

    Cooper said: “Zahawi and his Conservative cabinet colleagues are arrogantly trying to brush this under the carpet. There are facts that still need to be established so there must be an independent investigation to get to the bottom of this. The British public has lost all faith in Conservative ministers to tell the truth after years of scandal.”

    Meanwhile, Labour has also written to Daniel Greenberg, the new parliamentary commissioner for standards, asking whether Zahawi should have declared Balshore Investments in the public register of members’ interests.

    Anneliese Dodds, the Labour chair, said Zahawi’s new remarks raised more questions. “This carefully worded statement blows a hole in Nadhim Zahawi’s previous accounts of this murky affair,” she said. “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’.”

    She added: “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.”

    Several senior ministers have defended Zahawi, including the prime minister. At prime minister’s questions on Wednesday, Sunak said Zahawi had “already addressed this matter in full and there’s nothing more that I can add”.

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    ( With inputs from : www.theguardian.com )

  • Nadhim Zahawi claims error with his taxes ‘careless not deliberate’

    Nadhim Zahawi claims error with his taxes ‘careless not deliberate’

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    The Tory party chair, Nadhim Zahawi, has said HMRC concluded his tax errors were “careless and not deliberate” after reports that he paid a penalty as part of a multimillion-pound settlement.

    The former chancellor, who still attends Rishi Sunak’s cabinet, released a statement to “address some of the confusion about my finances” after it emerged he had agreed to pay millions to the tax agency in December.

    Zahawi’s comments came after the Guardian reported he had paid a 30% penalty as part of an estimated total tax bill of almost £5m.

    He said: “As a senior politician I know that scrutiny and propriety are important parts of public life. Twenty-two years ago I co-founded a company called YouGov.

    “I’m incredibly proud of what we achieved. It is an amazing business that has employed thousands of people and provides a world-beating service.

    “When we set it up, I didn’t have the money or the expertise to go it alone. So I asked my father to help. In the process, he took founder shares in the business in exchange for some capital and his invaluable guidance.

    “Twenty-one years later, when I was being appointed chancellor of the exchequer, questions were being raised about my tax affairs. I discussed this with the Cabinet Office at the time.

    “Following discussions with HMRC, they agreed that my father was entitled to founder shares in YouGov, though they disagreed about the exact allocation. They concluded that this was a ‘careless and not deliberate’ error.”

    Penalties are applied if someone does not pay the correct tax at the right time.

    “So that I could focus on my life as a public servant, I chose to settle the matter and pay what they said was due, which was the right thing to do,” he said.

    “Additionally, HMRC agreed with my accountants that I have never set up an offshore structure, including Balshore Investments, and that I am not the beneficiary of Balshore Investments.

    “This matter was resolved prior to my appointments as chancellor of the duchy of Lancaster and subsequently chairman of the party I love so much. When I was appointed by the prime minister, all my tax affairs were up to date.”

    Labour’s deputy leader, Angela Rayner, called for an explanation earlier on Saturday. “I believe his position is untenable,” she said. “If he’s lied and misled the public and HMRC regarding his tax affairs then I think his position is untenable.”

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    ( With inputs from : www.theguardian.com )

  • Nadhim Zahawi’s position as Tory chair ‘untenable’, says Labour

    Nadhim Zahawi’s position as Tory chair ‘untenable’, says Labour

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    Nadhim Zahawi’s position as Conservative party chair is “untenable” after reports he paid a penalty as part of a seven-figure tax settlement, Labour has said.

    The former chancellor, who attends cabinet meetings, has faced pressure in parliament and the media after it emerged he agreed to pay millions to HMRC in December after a settlement with the tax agency.

    Labour’s deputy leader, Angela Rayner, called for an explanation on Saturday after the Guardian reported that Zahawi paid a 30% penalty, taking the estimated total tax bill to more than £4.8m.

    She told BBC Breakfast: “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.

    “And 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.

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

    Earlier this week, Labour called for an inquiry into whether Zahawi broke the ministerial code or misled the public over his tax affairs.

    The shadow chancellor, Rachel Reeves, also called for Zahawi to go.

    Speaking at a Fabian Society conference on Saturday, she said: “A few months ago … he was chancellor of the exchequer and responsible for Britain’s tax affairs and tax collection, and we now find that he wasn’t so keen to pay himself.

    “So if the prime minister wants to stick by his commitment for integrity, honesty and professionalism, he should do the right thing and sack Nadhim Zahawi.”

    The deputy prime minister, Dominic Raab, told BBC Radio 4’s Today programme Zahawi had been “transparent about the fact all the tax has been paid”.

    “I don’t know the full details of Nadhim’s tax affairs because they are personal,” he said. “What I do know is that he’s made very clear that he’s paid all of his tax, that he’s got no outstanding tax liabilities or nothing further due, and he’s obviously engaged with HMRC to achieve that.”

    Asked if Zahawi should give a statement to the Commons, Raab added: “That’s a matter for him but what I’d emphasise is he has been transparent about the fact that all the tax has been paid and he doesn’t have any tax outstanding.”

    Penalties are applied if someone does not pay the correct tax at the right time.

    A source familiar with the payment said a penalty was triggered as a result of a non-payment of capital gains tax due after the sale of shares in YouGov, the polling company Zahawi co-founded.

    He could have been subject to larger penalties had he not reached a settlement towards the end of last year, they claimed.

    The YouGov shares were held through Balshore Investments, a Gibraltar-registered family trust, from which Zahawi has previously denied benefiting. YouGov has described Balshore Investments as “a family trust of Nadhim Zahawi”.

    The former chancellor has said “he does not have, and never has had, an interest in Balshore Investments and he is not a beneficiary”. Zahawi founded YouGov in 2000 and Balshore had sold its stake in the business by 2018.

    Last summer news reports emerged about Zahawi’s financial affairs, including that the HMRC was looking at his taxes. At the time, Zahawi described such reports as “smears”. It is understood that after those reports a representative for Zahawi approached HMRC to discuss his tax position.

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    ( With inputs from : www.theguardian.com )