Alert – Ex-chancellor Nadhim Zahawi confirms he stumped up nearly £5m in tax settlement with HMRC as he says ‘sorry’ over row that led to his sacking ahead of his exit from Parliament – News Alerts

Former chancellor Nadhim Zahawi today confirmed he stumped up almost £5million in his tax settlement with HMRC.

The Stratford-on-Avon MP, who recently revealed he will be quitting Parliament at the general election, also said he was ‘sorry’ over the furious row that led to his sacking.

Mr Zahawi was fired as Conservative Party chairman by Rishi Sunak in January last year after being found to have committed a ‘serious breach’ of ministerial rules.

He was judged by the Prime Minister’s ethics adviser to have failed to properly disclose his tax dispute when he was appointed to various Government roles.

At the time, it was reported the sum handed over to the tax authorities by Mr Zahawi was at least £4.8million, including a £1.1million penalty.

Appearing on the BBC’s Sunday With Laura Kuenssberg programme this morning, Mr Zahawi apologised for not being ‘more explicit’ over his tax settlement.

Former chancellor Nadhim Zahawi today confirmed he stumped up almost £5million in his tax settlement with HMRC

Appearing on the BBC ‘s Sunday With Laura Kuenssberg programme this morning, Mr Zahawi apologised for not being ‘more explicit’ over his tax settlement

Mr Zahawi was fired as Conservative Party chairman by Rishi Sunak in January last year after being found to have committed a ‘serious breach’ of ministerial rules

‘As I said in my retirement letter, my mistakes are my own,’ the ex-Cabinet minister said.

‘I’m sorry that when I had my settlement with HMRC two years ago, I should have probably been more explicit in the details in the ministerial declaration as to how the settlement was arrived at, and that’s my own mistake.’

Mr Zahawi, who served as chancellor for two months between July and September 2022, added: ‘HMRC found that it was non-deliberate, it was a careless mistake.

‘They also accepted that I was not the beneficiary of an offshore structure or an offshore trust.

‘But before the apportionment of shares in YouGov when it was first launched, I should have had more of the shares in my name, and as it’s been reported, the total payment was just shy of £5million.’

The PM’s ethics adviser, Sir Laurie Magnus, was critical of Mr Zahawi for describing news stories about his tax affairs as ‘smears’ in July 2022 and for failing to correct the record until much later.

But, asked whether he regretted his comments accusing journalists of smearing him in their reporting, Mr Zahawi said today: ‘No, because the smears were so wide – things like the National Crime Agency, which I’ve never ever had any dealings with or any investigations from.’

The outgoing MP said it was a ‘really tough choice’ to leave the House of Commons at the upcoming general election.

Mr Zahawi said: ‘The heart said keep going and the head said it’s time to let a younger, more energetic person fight a pretty vital election for my party.

‘It’s a wonderful seat – best seat in Parliament – and I think it’s deserving of a young, energetic Conservative – the list will be as long as my arm.’

Mr Zahawi revealed he was standing down from Parliament on Thursday in a resignation letter posted to X, formerly Twitter.

He said: ‘After 14 years in Parliament, and multiple roles in Cabinet and Government, I have come to the decision not to stand again at the next general election.’

Mr Zahawi said he would continue to serve his constituents until the next election and that ‘the PM, and the Conservative Party, will continue to have my unswerving support into and beyond the next general election’.

He was the 65th Tory MP to announce they will not stand at the next election.

How Nadhim Zahawi’s tax scandal unfolded

April 2021

Sir Laurie said HM Revenue and Customs (HMRC) interactions with Mr Zahawi over the tax issue began in April 2021, when he was a business minister.

June 2021

Mr Zahawi and his advisers met with officials from HMRC in June 2021, according to Sir Laurie.

The ethics adviser said: ‘Mr Zahawi has told me that he had formed the impression that he and his advisers were merely being asked certain queries by HMRC concerning his tax affairs.’

July 5, 2022

Mr Zahawi becomes Chancellor of the Exchequer.

According to Sir Laurie’s findings, after his appointment Mr Zahawi completed a declaration of interests form, but it ‘contained no reference to the HMRC investigation’.

‘A later form acknowledged (by way of an attachment) that Mr Zahawi was in discussion with HMRC to clarify a number of queries,’ Sir Laurie added.

July 9, 2022

The Independent reports that HMRC officials were investigating Mr Zahawi and his tax affairs.

The Observer newspaper also reports that a ‘flag’ was raised by officials about the financial affairs of the Tory MP before he was promoted to the high-profile role that included responsibility for HMRC.

July 11, 2022

In an interview with Sky News, Mr Zahawi said that he was being ‘smeared’.

‘I was clearly being smeared. I was told that the Serious Fraud Office, the National Crime Agency, HMRC, were looking into me.

‘I’m not aware of this. I’ve always declared my taxes – I’ve paid my taxes in the UK,’ he said.

July 15, 2022

Mr Zahawi received a letter from HMRC, which according to the account he provided to the investigation much later, changed the then-Chancellor’s view.

The ‘impression that he and his advisers were merely being asked certain queries by HMRC concerning his tax affairs’ had ‘persisted until he received a letter from HMRC on 15 July 2022 (dated 13 July)’, Sir Laurie said of Mr Zahawi’s account of the matter.

The ethics adviser said that after the letter, Mr Zahawi updated his declaration of interests form, acknowledging that his tax affairs were under investigation, but ‘provided no further details other than the statement made previously that he was clarifying queries’.

‘An HMRC investigation of the nature faced by Mr Zahawi would be a relevant matter for a minister to discuss and declare as part of their declaration of interests,’ he said.

August to September 2022

Mr Zahawi and HMRC resolved that tax was owed and a penalty should be applied, with a resolution ‘in principle’ in August, and a ‘final settlement’ signed in September, according to the ethics adviser.

And Sir Laurie added: ‘Mr Zahawi failed to update his declaration of interest form appropriately after this settlement was agreed in principle in August 2022.’

Mr Zahawi was replaced as Chancellor when Liz Truss became prime minister on September 6, moving to the Cabinet Office.

October 2022

Mr Zahawi ‘failed to disclose relevant information’ about the investigation and his penalty during the appointments process for new roles in Government in September and October, according to the ethics adviser.

Sir Laurie said: ‘Without knowledge of that information, the Cabinet Office was not in a position to inform the appointing prime minister.’

January 14, 2023

The Sun on Sunday reported that Mr Zahawi had agreed to pay several million pounds in tax to settle a dispute with HMRC.

A spokesman for the Conservative Party chairman said that his taxes were ‘properly declared’, that he ‘has never had to instruct any lawyers to deal with HMRC on his behalf’, adding that ‘Mr Zahawi’s taxes are properly declared and paid in the UK’.

January 16, 2023

Mr Zahawi submitted his declaration of interests form in relation to his role as minister without portfolio and Conservative Party chairman, and included detail of the outcome of the HMRC investigation, according to the independent ethics adviser.

But Sir Laurie added: ‘At the time of my investigation this declaration was under consideration by the permanent secretary and had yet to be submitted onward to me for consideration.

‘Given the seriousness of this matter, I would have expected Mr Zahawi to attend to his submission much more rapidly and… to have notified Cabinet Office officials at the time of his appointment.’

January 18, 2023

The Prime Minister and Downing Street defend Mr Zahawi over the allegations.

At Prime Minister’s Questions, Mr Sunak said the Tory chairman ‘has already addressed this matter in full and there’s nothing more that I can add’.

Downing Street said Mr Sunak had full confidence in the Stratford-on-Avon MP, having taken him ‘at his word’ over the matter.

January 20, 2023

The Guardian newspaper reported that Mr Zahawi paid a 30 per cent penalty as part of the dispute, with estimates that he paid £4.8 million in total.

January 21, 2023

Mr Zahawi admitted paying a settlement to HMRC after a ‘careless and not deliberate’ tax error related to his father’s shareholding in YouGov.

He said that when he set up the YouGov polling company in 2000, his father took founder shares.

‘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,’ he said.

‘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.

‘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.’

Mr Zahawi said the matter was resolved and ‘all my tax affairs were up to date’ by the time he became Chancellor of the Duchy of Lancaster last September.

January 23, 2023

Mr Sunak ordered an investigation by his new ethics adviser into Mr Zahawi.

The PM acknowledged that ‘clearly in this case there are questions that need answering’.

January 25, 2023

Mr Sunak was grilled by Labour leader Sir Keir Starmer about Mr Zahawi during Prime Minister’s Questions.

Mr Sunak told the Commons that while it would have been ‘politically expedient’ to sack the Tory chair, ‘due process’ meant that the investigation into his tax affairs should be allowed to conclude.

He also acknowledged that he had not been given the full picture of Mr Zahawi’s tax affairs when he told MPs that the senior Conservative had given a ‘full’ account.

January 28, 2023

Downing Street denied reports that Mr Sunak received informal advice in October that there could be a reputational risk to the Government from Mr Zahawi and his tax affairs.

The Observer newspaper, citing sources, said that Government officials gave the new Prime Minister informal advice as he drew up his Cabinet in October regarding the risks from the HMRC investigation settled only months earlier.

A Number 10 spokesperson said: ‘These claims are not true.’

January 29, 2023

Mr Sunak sacked Mr Zahawi as Conservative Party chairman after the ethics inquiry found a ‘serious breach’ of the ministerial code.

Sir Laurie’s four-page report found that the Mr Zahawi had shown ‘insufficient regard for the general principles of the ministerial code and the requirements in particular, under the seven Principles of Public Life, to be honest, open and an exemplary leader through his own behaviour’.