MP NADHIM Zahawi has finally spoken out about his tax affairs following calls for him to be sacked from the Cabinet.
The Stratford MP and Conservative Party Chair broke his silence on Saturday afternoon (January 21) – a week after the national newspapers reported he had paid millions of pounds to the tax man.
It was reported that he had had to pay £3.7 million to HMRC following an investigation into his financial affairs.
Then days later it emerged this figure could be closer to £5 million due to an added penalty.
Former Chancellor Mr Zahawi said in a statement that there had been an error in his tax affairs, which had been accepted by HMRC as having been “careless and not deliberate”.
His statement does not say how much he had to pay to HMRC or make clear whether he had a penalty or not.
Prime Minister Rishi Sunak is reported to be satisfied with Mr Zahawi’s account.
Last July it was reported that an investigation had been launched into Mr Zahawi’s financial affairs – specifically whether the 55-year-old had avoided tax by using an offshore company called Baltimore Investments to hold shares in YouGov – a polling company he co-founded.
At the time, Mr Zahawi, who is reportedly worth more than £100 million, said the allegations of wrong doing were politically motivated “smears”.
Mr Zahawi previously said he was not a beneficiary of Gibraltor-based family trust, Baltimore Investments, which sold a £20 million stake in YouGov in 2018.
But records show cash he owed to YouGov was partly repaid from Balshore dividends, it is reported.
Mr Zahawi’s statement, released on Saturday, 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.
“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.
“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.
“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.”
But the Labour party, who had called on the Prime Minister to sack Mr Zahawi as Conservative Party Chair, said there were still questions to be answered.
Labour Party chairwoman Anneliese Dodds said: “This carefully worded statement blows a hole in Nadhim Zahawi’s previous accounts of this murky affair.
“He must now publish all correspondence with HMRC so we can get the full picture.”