STRATFORD MP Nadhim Zahawi is said to be hanging onto his job as Conservative chair by a thread.
But sources close to Mr Zahawi, who it has been revealed had to pay a penalty to resolve a tax dispute with HMRC, is “absolutely not resigning”.
Prime Minister Rishi Sunak has been urged by Labour to sack Mr Zahawi, who he brought back into a Cabinet role after entering No 10, with questions swirling over how much the PM knew about the former chancellor’s tax affairs.
Mr Zahawi sought to end questions about his financial dealings by releasing a statement at the weekend in which he said there had been an error in his tax affairs, which had been accepted by HMRC as having been “careless and not deliberate”.
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.”