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Tory chairman Nadhim Zahawi under fire over seven-figure HMRC settlement

20 Jan 2023 3 minute read
Former Chancellor Nadhim Zahawi. Photo Liam McBurney PA Images

Tory party chairman Nadhim Zahawi faces fresh questions over his tax affairs after he was accused of paying a penalty as part of a multi-million pound settlement with HMRC.

The former Chancellor, who attends Rishi Sunak’s Cabinet, has been under pressure since it was reported that he paid a seven-figure sum to end a dispute.

Now, the Guardian has reported that he paid a 30% penalty, taking the estimated total to more than £4.8 million.

Both Mr Zahawi’s team and the Conservative Party were contacted about the latest allegation. Neither have responded to rebut the report.

Labour has called for an inquiry into Mr Zahawi and deputy leader Angela Rayner urged HMRC to clear up the “serious questions raised about a potential conflict of interest”.

Tax lawyer Dan Neidle has been working to expose the minister’s tax affairs and has estimated that he owed £3.7 million.

Interest could be due on top of the 30% penalty reported by the Guardian, taking the possible total to in excess of £4.8 million.

Mr Neidle, of the Tax Policy Associates think tank, said “you don’t pay a 30% penalty if your tax affairs are in order”.

“You do it, at best, if you’ve been careless if you haven’t paid tax that’s due,” he said.

Inevitable

The lawyer said the chances Mr Zahawi had paid a penalty were “almost inevitable” after the Sun on Sunday reported that he had settled a seven-figure sum with HMRC.

Asked about the level of the reported penalty, Mr Neidle said: “It probably means that at least he didn’t admit to deliberate behaviour, it probably means he admitted to carelessness.”

The government website says a penalty of between 0 and 30% is due if it arises because of a lack of reasonable care. A deliberate error can incur a penalty of between 20 and 70%.

The Conservative MP allegedly avoided tax by using an offshore company registered in Gibraltar to hold shares in the polling company he co-founded, YouGov.

YouGov’s 2009 annual report showed a more than 10% 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.

Ms Rayner said: “If HMRC has applied a 30% penalty in this case, the British people deserve to know why, yet the Conservative Party chair is maintaining a deafening silence.

“It’s quite clearly a matter of public interest to know if the man who was, until recently, in charge of the UK tax system has accepted a fault or been subjected to a penalty to settle his own tax bill.

“Rishi Sunak must explain what he knew about this, and why he appointed Nadhim Zahawi to his Cabinet.”

Properly declared

A spokesman for Mr Zahawi has previously said his taxes are “properly declared and paid in the UK” and the minister “has never had to instruct any lawyers to deal with HMRC on his behalf”.

Mr Sunak has defended his ally, telling Prime Minister’s Questions on Wednesday that Mr Zahawi “has already addressed this matter in full and there’s nothing more that I can add”.

The Prime Minister’s press secretary said Mr Zahawi “has spoken and been transparent with HMRC”.

On whether Mr Sunak believes the matter is now closed, she 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.”


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Mab Meirion
Mab Meirion
12 days ago

A government of the guilty for the guilty…

Mab Meirion
Mab Meirion
12 days ago
Reply to  Mab Meirion

Resign and shame the devil…

In common usage since 1555, to paraphrase Hugh Latimer.

Mab Meirion
Mab Meirion
12 days ago

His foray into British politics has cost him how much ? He won’t be the last tax dodger to be outed from this Tory Crime Mob…

Mab Meirion
Mab Meirion
12 days ago

Not content to bring shame upon themselves they always make their families
co-conspirators see Lady Knickers…

Windy
Windy
12 days ago

It’s the becoming the norm
The only real news will be if someone finds an honest minister from this lot

Mab Meirion
Mab Meirion
12 days ago
Reply to  Windy

You would be hard pressed to make up a jury from the lot of them…

Mab Meirion
Mab Meirion
12 days ago

The words of Britain’s Prime Minister…

“We inherited a bunch of formulas from labour that shoved all the funding into deprived urban areas and that needed to be undone. I started the work of undoing that”…

He is the boss, like Fat Shanks before him, setting the worst possible example…those words will be his Albatross, written in flowers to float down the Holy River as his smoke rises above the Ghatts…a proud man’s soul is worthless…

Mab Meirion
Mab Meirion
12 days ago

Rishi fined for not wearing his seat belt, I thought his dodgy super cops were there to protect him, but not from his own stupidity, obviously…

Last edited 12 days ago by Mab Meirion
Windy
Windy
11 days ago
Reply to  Mab Meirion

It proves that the so called police officers that are there to protect this prime minister and his predecessor are willing to turn a blind eye when the law that they are supposed to uphold is broken they will probably be given a mbe or some other piece of tin rather than the sack for not doing the job they swore to uphold

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