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Labour has called on Rishi Sunak to dismiss Nadhim Zahawi from his cabinet after questions over the Tory chairman’s tax affairs remain unanswered.

Questions have swirled following an article in The Sun on Sunday, which claimed a seven-figure payment was made by Mr Zahawi to end a dispute with the taxman “after scrutiny of his family’s financial affairs”.

The paper alleged there were questions over his use of an offshore company – a Gibraltar-registered family trust called Balshore Investments – to hold shares in the polling firm YouGov.

Mr Zahawi has previously denied he was a beneficiary of Balshore Investments.

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HMRC is facing pressure to reveal whether Mr Zahawi paid a penalty to the tax office and Labour has written to the government department arguing the “public requires answers” over the matter.

After the Guardian newspaper earlier on Friday reiterated the allegation that Mr Zahawi agreed to pay a penalty to HMRC as part of a seven-figure settlement, Labour’s deputy leader Angela Rayner has called for him to be “dismissed”.

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“Rishi Sunak promised a government of integrity, professionalism, and accountability but instead he’s propping up a motley crew of scandal-ridden ministers,” she said in a statement.

“Nadhim Zahawi’s story doesn’t add up.

“The position of the man who was until recently in charge of the UK’s tax system and who this prime minister appointed Conservative Party Chair is now untenable.

“It’s time for Rishi Sunak to put his money where his mouth is and dismiss Nadhim Zahawi from his cabinet.”

Labour Party Chair Anneliese Dodds told Sky News: “Rishi Sunak promised honesty, integrity and accountability on the steps of Number 10.

“So if his Party Chair Nadhim Zahawi is not being clear to either HMRC or the British public, then he has no place in government.

“The public are fed up with the stench of Conservative sleaze.”

‘The public requires answers’

Mr Zahawi was seen going into Number 10 Downing Street on Friday and did not respond when asked by Sky News political correspondent Rob Powell if he had been honest about his tax affairs.

Sky News has made a number of approaches to the Tory MP and his team to clarify the situation around the payment to HMRC, but he has still not revealed if the report is accurate.

Instead, we received a broader comment from the MP’s spokesperson, who said his tax affairs “were and are fully up to date and are paid in the UK”, adding: “He has always said that he will answer any questions from HMRC as he always has done.”

HMRC has said it does not comment on individual cases, but Labour deputy leader Ms Rayner said “given the public interest” in the case “the public requires answers”.

She claimed: “In particular, there appears to be an element of special treatment directed towards Nadhim Zahawi by HMRC.”

Zahawi’s responses to tax dispute claims carefully worded


Rob Powell Political reporter

Rob Powell

Political correspondent

@robpowellnews

Questions about Nadhim Zahawi’s financial affairs followed him through his relatively short-lived campaign to become prime minister last summer.

The allegations centre on his links to a Gibraltar-based trust ‘Balshore Investments Limited’, of which his father Hareth Zahawi is a director.

Nadhim Zahawi has said that neither he nor his wife benefit from this trust.

However, when he founded the polling firm YouGov in May 2000, the trust was allocated shares in the company equalling the number given to Mr Zahawi’s co-founder Stephan Shakespeare.

After digging through pages of documents, the accountant and tax campaigner Dan Neidle has suggested there would have been a tax saving of several million pounds when these shares were sold because they were held by an offshore trust.

It’s this figure the Guardian is suggesting is at the centre of the reported repayment to HMRC.

Nadhim Zahawi’s responses to these stories have always been very specific and carefully worded.

After these latest accusations, a spokesperson for the Tory chairman said he “does not recognise these numbers” and has “never sought legal advice for dealing with HMRC”.

They also insisted Mr Zahawi’s taxes were up to date and fully paid in the UK.

Sources have briefed that Dan Neidle – who is a Labour member – is a “labour activist” and the allegations are merely taken from his “blog”.

One of Mr Zahawi’s more outspoken interventions came during the Number 10 leadership race in July last year though, when he said he was the victim of a “smear” over his financial affairs

That statement puts the cabinet minister in a difficult spot if concrete evidence emerges that he has repaid money to HMRC and potentially even been issued with a penalty.

The timing of any investigation or settlement could be important as well, given Mr Zahawi was briefly chancellor last year.

Ms Rayner called on HMRC to explain the nature of the payment and whether the former chancellor “has admitted fault or incurred financial penalties as part of his settlement”.

A spokesman for Mr Zahawi has said his taxes are “properly declared” and he “has never had to instruct any lawyers to deal with HMRC on his behalf”.

“As we have repeatedly said, Nadhim’s taxes are up to date and are fully paid in the UK. Mr Zahawi does not recognise these numbers and he has never sought legal advice for dealing with HMRC,” the spokesman said.

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Zahawi asked if he settled with HMRC

PM ‘has full confidence’ in Zahawi

Mr Sunak defended his colleague at Prime Minister’s Questions (PMQs) on Wednesday, saying Mr Zahawi “has already addressed this matter in full and there’s nothing more that I can add”.

Downing Street was pressed for more information during a press briefing on Friday.

Asked if any concerns had been raised about Mr Zahawi’s taxes before Mr Sunak made him party chair, the prime minister’s official spokesman said he was not aware of any “specific” conversations.

Before entering politics, Mr Zahawi co-founded YouGov and is thought to have a net worth of around £100m.

Questions over his tax affairs have been raised before – namely ahead of his short tenure as chancellor in the closing days of Boris Johnson’s premiership.

The Observer claimed civil servants in the Cabinet Office’s propriety and ethics team alerted the prime minister to an HMRC “flag” over Mr Zahawi before his appointment, but Mr Johnson went ahead “despite the possible concerns over his tax affairs”.

The minister claimed he was “clearly being smeared” in his campaign to become Conservative Party leader, telling Sky News he had “always” paid his taxes and had “declared” them in the UK.

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Trump: I won’t send US troops to Ukraine – but might help by air

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Trump: I won't send US troops to Ukraine - but might help by air

Donald Trump has said American troops will not be sent to Ukraine, but the US may provide air support as part of a peace deal with Russia.

A day after his extraordinary White House meeting with Ukrainian President Volodymyr Zelenskyy and the leaders of Kyiv’s European allies, the US president told Fox News “when it comes to security, [Europeans] are willing to put people on the ground. We’re willing to help them with things, especially, probably, by air”.

Ukraine war – follow the latest developments

Mr Trump did not elaborate, but White House press secretary Karoline Leavitt told reporters US air support was “an option and a possibility”.

She said the US president “has definitively stated US boots will not be on the ground in Ukraine, but we can certainly help in the coordination and perhaps provide other means of security guarantees to our European allies”.

Air support could take many forms, including missile defence systems or fighter jets enforcing a no-fly zone – and it’s not clear what role the US would play under any proposed peace deal.

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What security guarantees could work?

Zelenskyy-Putin summit

It comes as planning for a possible Zelenskyy-Putin summit get under way. Talks between the Ukrainian and Russian president are seen by Mr Trump as vital to ending the war.

Sky News understands a meeting could happen before the end of the month, with Geneva, Vienna, Rome, Budapest, and Doha among the venues being considered.

Geneva, Switzerland, is considered the best option, with Rome or the Vatican disliked by the Russians and Budapest, Hungary, not favoured by the Ukrainians.

European allies are understood to want security guarantees to be defined before the meeting.

A NATO-like treaty, guaranteeing Ukraine’s allies would come to its defence in case of any future Russian attack, is being worked on and could be completed by next week.

Like the US, Sky News understands Italy is opposed to putting boots on the ground in Ukraine.

But EU diplomats are confident this is the best chance yet to stop the war, and allies could return to Washington in early September to celebrate any deal being struck.

Read more on Sky News:
‘Don’t trust Russia,’ diplomat warns
Why peace may be further away, not closer
Five key takeaways from White House talks

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Sky’s Mark Stone takes you inside Zelenskyy-Trump 2.0

Trump still has doubts about Putin

Despite the renewed optimism about a peace deal following Monday’s White House summit, Mr Trump has admitted Vladimir Putin might not be sincere about wanting to end the war.

“We’re going to find out about President Putin in the next couple of weeks,” he told Fox News.

He’s previously threatened to put more sanctions on Russia if a peace deal isn’t reached, though previously set deadlines have been and gone.

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Russia launched its biggest air assault on Ukraine in more than a month on Monday night, sending 270 drones and 10 missiles, the Ukrainian air force said.

Ukraine’s European allies in the so-called Coalition of the Willing, an initiative spearheaded by Sir Keir Starmer and Emmanuel Macron, discussed additional sanctions to place on Russia on Tuesday.

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Ukrainian diplomat involved in 90s nuclear deal with Russia warns Trump about ‘very big mistake’ with Putin

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Ukrainian diplomat involved in 90s nuclear deal with Russia warns Trump about 'very big mistake' with Putin

Ukrainians have given a lukewarm reaction to this week’s White House summit.

There is bafflement and unease here after US President Donald Trump switched sides to support his Russian counterpart, Vladimir Putin, dropping calls for a ceasefire and proposing that Ukraine surrender territory.

While allies are talking up the prospects of progress, people here remain unconvinced.

Ukraine war latest – Trump rules out using US troops

Boris Yeltsin (2L) and Bill Clinton (C) sign the 1994 Budapest Memorandum
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Boris Yeltsin (2L) and Bill Clinton (C) sign the 1994 Budapest Memorandum

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What security guarantees could work?

The Trump administration’s contradictory statements on possible security guarantees are causing concern here.

MP Lesia Vasylenko told Sky News it is not at all clear what the allies have in mind.

“Who is going to be there backing Ukraine in case Russia decides to revisit their imperialistic plans and strategies and in case they want to restart this war of aggression?”

For many Ukrainians, there is a troubling sense of deja vu.

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Ukrainian drone strikes Russian fuel train

In the 1994 Budapest Memorandum, Ukraine agreed to give up not land but its nuclear arsenal, inherited from the Soviet Union, in return for security assurances from Russia and other powers.

They know how that ended up to their enormous cost. Putin reneged on Russia’s side of the bargain, with his invasion of Crimea in 2014 and once again with his full-scale attack three and a half years ago.

We met veteran Ukrainian diplomat Yuri Kostenko, who helped lead those negotiations in the 90s.

Veteran Ukrainian diplomat Yuri Kostenko helped lead the Budapest Memorandum negotiations
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Veteran Ukrainian diplomat Yuri Kostenko helped lead the Budapest Memorandum negotiations

He said there is a danger the world makes the same mistake and trusts Vladimir Putin when he says he wants to stop the killing, something Mr Trump said he now believes.

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“It’s not true, it’s not true, Russia never, never, it’s my practices in more than 30 years, Russia never stop their aggression plans to occupy all Ukraine and I think that Mr Trump, if he really believes Mr Putin, it will be a very big mistake, Mr Trump, a very big mistake.”

Before the Alaska summit, allies agreed the best path to peace was forcing Mr Putin to stop his invasion, hitting him where it hurts with severe sanctions on his oil trade.

But Mr Trump has given up calls for a ceasefire and withdrawn threats to impose those tougher sanctions.

Instead, he has led allies down a different and more uncertain path.

Read more on Sky News:
Putin wasn’t there, but influenced summit
Peace further away, not closer
Five takeaways from White House talks

Ukrainians we met on the streets of Kyiv said they would love to believe in progress more than anything, but are not encouraged by what they are hearing.

While the diplomacy moves on in an unclear direction, events on the ground and in the skies above Ukraine are depressingly predictable.

Russia is continuing hundreds of drone attacks every night, and its forces are advancing on the front.

If Vladimir Putin really wants this war to end, he’s showing no sign of it, while Ukrainians fear Donald Trump is taking allies down a blind alley of fruitless diplomacy.

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Putin wasn’t at the White House, but his influence was – the moments which reveal his hold over Trump

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Putin wasn't at the White House, but his influence was - the moments which reveal his hold over Trump

Vladimir Putin wasn’t at the White House but his influence clearly was. At times, it dominated the room.

There were three key moments that revealed the Russian president‘s current hold over Donald Trump.

The first was in the Oval Office. Sitting alongside Volodymyr Zelenskyy, the US president told reporters: “I don’t think you need a ceasefire.”

Ukraine talks latest: Zelenskyy ‘ready to meet’ Putin after Trump summit

Vladimir Putin shaking hands with Donald Trump when they met last week. Pic: Reuters
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Vladimir Putin shaking hands with Donald Trump when they met last week. Pic: Reuters

It was a stunning illustration of Mr Trump’s about-face in his approach to peace. For the past six months, a ceasefire has been his priority, but after meeting Mr Putin in Alaska, suddenly it’s not.

Confirmation that he now views the war through Moscow’s eyes.

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Trump applauds Putin and shares ride in ‘The Beast’ last week

The second was the format itself, with Mr Trump reverting to his favoured ask-what-you-like open-ended Q&A.

In Alaska, Mr Putin wasn’t made to take any questions – most likely, because he didn’t want to. But here, Mr Zelenskyy didn’t have a choice. He was subjected to a barrage of them to see if he’d learnt his lesson from last time.

It was a further demonstration of the special status Mr Trump seems to afford to Mr Putin.

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The third was their phone call. Initially, President Trump said he’d speak to the Kremlin leader after his meeting with European leaders. But it turned out to be during it.

A face-to-face meeting with seven leaders was interrupted for a phone call with one – as if Mr Trump had to check first with Mr Putin, before continuing his discussions.

We still don’t know the full details of the peace proposal that’s being drawn up, but all this strongly suggests that it’s one sketched out by Russia. The White House is providing the paper, but the Kremlin is holding the pen.

Read more:
Four key takeaways from the White House Ukraine summit
Trump has taken peace talks a distance not seen since the war began

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Trump, Zelenskyy and the suit: What happened?

For Moscow, the aim now is to keep Mr Trump on their path to peace, which is settlement first, ceasefire later.

It believes that’s the best way of securing its goals, because it has more leverage so long as the fighting continues.

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But Mr Putin will be wary that Mr Trump is pliable and can easily change his mind, depending on the last person he spoke to.

So to ensure that his sympathies aren’t swayed, and its red lines remain intact, Russia will be straining to keep its voice heard.

On Monday, for example, the Russian foreign ministry was quick to condemn recent comments from the UK government that it would be ready to send troops to help enforce any ceasefire.

It described the idea as “provocative” and “predatory”.

Moscow is trying to drown out European concerns by portraying itself as the party that wants peace the most, and Kyiv (and Europe) as the obstacle.

But while Mr Zelenskyy has agreed to a trilateral meeting, the Kremlin has not. After the phone call between Mr Putin and Mr Trump, it said the leaders discussed “raising the level of representatives” in the talks between Russia and Ukraine. No confirmation to what level.

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