Nadhim Zahawi: Labour calls on PM to dismiss Tory chairman amid tax dispute claims and slams ‘motley crew of scandal-ridden ministers’
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.
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”.
“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
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.
It “cuts my heart” and is a “betrayal”.
This was the response of a Ukrainian soldier in a frontline combat regiment directly affected by Donald Trump’s decision to pause US military support to Ukraine.
Serhii, 45, maintains a unit of US-supplied Bradley infantry fighting vehicles that are defending an area of eastern Ukraine from attacking Russian forces.
The halt to American military aid – if sustained – means there will be no new ammunition and no ability to repair any of the vehicles when they are damaged – a constant risk.
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On a recent mission by the 425th Storming Regiment “Skala”, three Bradleys went into battle towards the direction of the city of Pokrovsk, an area of heavy clashes.
Only two returned after the other was hit by the Russian side.
Troops said it would be for Ukraine to defend their land without US military support
“It’s going to be very hard,” Serhii said, standing next to a large Bradley, covered by a camouflage net and tucked under a line of trees in the Donetsk region.
“These vehicles are really good. You can fight back with them. And not just defend, you can even advance. It’s a shame we didn’t have this equipment two or three years ago.”
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Trump pauses military aid to Ukraine – what now?
The regiment has been using Bradleys for a number of months. Serhii is the lead mechanic.
The tracked vehicles, armed with a chain gun that can fire 200 rounds per minute, were first developed in the 1980s but have been fitted with modern reactive armour that means they can survive drone strikes, rocket attacks and the shrapnel from artillery rounds.
“The vehicle’s protection… is fantastic,” Serhii said, with clear admiration for the equipment compared with Soviet-era fighting vehicles that many Ukrainian troops have to use.
Soliders said the Bradley infantry vehicles are good for advancing, not just defence
He said the crew of one of his Bradleys was hit by two rocket-propelled grenades but was able to continue driving and was unharmed.
Serhii, who comes from the Donetsk region, said he felt betrayed by Mr Trump’s decision to halt such crucial support.
The US president ordered the move as he attempts to put pressure on Ukrainian President Volodymyr Zelenskyy to negotiate a ceasefire deal with Russia.
“Although I’m not a politician, it’s a betrayal for us, for the guys who are defending Ukraine,” the soldier said.
Inside a US-supplied Bradley vehicle
Asked how he felt when he heard the news about the US president’s decision, Serhii said: “The latest news cuts my heart, I can answer you that way. It cuts my heart… If politicians solve issues this way, just by halting weapons supply in one move, that’s criminal.”
He signalled it would be harder for Ukrainian troops to defend their land without the US military support – but they would still fight.
“Even without this weapon, we believe we will move forward,” he said.
“They [the Russians] have to retreat, no matter what. The guys didn’t take up arms here for nothing, and they stand together. Together, all of us, as one, will defeat this enemy.”
As for whether he had a message for Mr Trump, the soldier said: “Don’t stop military aid. Politics is politics, but the people, I believe, are the most important.
“It will be very hard for us without such equipment. This equipment is good; it allows us to show results. And we will keep showing them. We’ve shown them before and we will keep showing them. That’s how it is. Thank you.”
Fighting ‘for my motherland’
Soldier Sedoi said he is ‘tired’ of the war
Sky News watched as two crews prepared their fighting vehicles for a potential mission on Thursday evening.
Sedoi, 41, commands one of the Bradleys and operates the gun.
He said the American-supplied vehicle gives him confidence when he goes into battle – and was also likely a scary prospect for Russian troops to have to encounter.
“We make a lot of noise. Everything catches fire and burns… It’s a good vehicle,” he said.
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Will Kyiv fall without US support?
Sedoi said he did not have a reaction to the news about the halt to American military support, saying: “I don’t get involved in their politics.”
However, he signalled he did want an end to the war – even if it meant Russia keeping some of the land it has seized.
“Let it end, so people stop dying. Because a lot of people have died,” he said.
Read more:
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Recently recovered from a shrapnel wound, Sedoi said he volunteered to fight after Vladimir Putin launched his full-scale war more than three years ago because of Russia’s brutality.
“I’ve heard what they do when they enter villages, what they do with children and women… I don’t want them to go any further… That’s why I’m here.
“But, to be honest, I’m getting tired of it.”
Yet still he and his fellow soldiers battle on. Asked why he was fighting, the soldier said: “For my motherland.”
A warning by Donald Trump to Vladimir Putin to stop “pounding” Ukraine or else, appears to have fallen on deaf ears after another night of devastating Russian strikes.
The persistent pummelling of Ukrainian towns and cities also follows a decision by the US president to stop sharing American intelligence and weapons with Kyiv – a move that is directly hampering the Ukrainian military’s ability to defend their skies from the Russian onslaught.
In the deadliest attack overnight, at least 11 people were killed and 30 wounded, including five children, in the town of Dobropillia, about 15 miles from the frontline in the Donestsk region of eastern Ukraine.
Ukraine war latest: Follow live updates
The Ukrainian police service said a Russian ballistic missile, rockets and attack drones hit eight multi-storey buildings as well as a shopping centre and dozens of cars.
Firefighters work at the site of the strike. Pic: Reuters/State Emergency Service of Ukraine
Pic: Reuters/State Emergency Service of Ukraine
“Some buildings were burnt down almost completely,” the national police of Ukraine said in a post on its Telegram social media channel.
Another three civilians were killed and seven injured in a drone attack on the Kharkiv region in the northeast of the country, according to a separate post by the interior ministry.
Just hours earlier, the US president posted a warning to the Kremlin on social media.
“Based on the fact that Russia is absolutely ‘pounding’ Ukraine on the battlefield right now, I am strongly considering large-scale banking sanctions, sanctions, and tariffs on Russia until a cease fire and FINAL SETTLEMENT AGREEMENT ON PEACE IS REACHED,” he wrote.
“To Russia and Ukraine, get to the table right now, before it is too late. Thank you!!!”
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Trump: ‘Ukraine difficult to deal with’
Kyiv will be watching closely to see whether Moscow’s continuing attacks will prompt Mr Trump to carry out his threat.
Ukrainian President Volodymyr Zelenskyy has been in crisis mode ever since Mr Trump returned to office and started attacking his record on the war, falsely calling him a dictator and even claiming – again erroneously – that Ukraine was to blame for Russia’s invasion.
Sky News on the ground in Dobropillia 24hrs before strike
A Sky News team was in Dobropillia 24 hours before the attack – stopping off to grab food at a pizza restaurant that was close to the site of at least two of the incoming strikes.
The restaurant is on a road of shops, including a clothes store and a small grocery outlet.
The town, which used to be home to 28,000 residents before Russia’s full-scale war, feels far more battle-hardened than areas further away from the frontline.
Fighting has been raging for months between invading Russian forces and Ukrainian troops, just over a dozen miles away, around the city of Pokrovsk.
Despite the closeness of the war, however, many civilians, including children, still live in Dobropillia.
In the most significant blow, Washington has paused the sharing on intelligence with its Ukrainian partners, instantly making it far harder for Ukraine to have a clear picture on the movement of Russian forces and weapons, while also hampering the ability of the Ukrainian armed forces to effectively conduct targeting attacks against Russian positions.
Read more:
The most significant part of Zelenskyy’s olive branch to Trump
Would the world be more peaceful if women were in charge?
A decision to stop the flow of military support to Ukraine will also have a huge impact on the country’s ability to keep defending itself.
The US has been Kyiv’s largest and most important supplier of arms, including the Patriot air defence system – the only piece of equipment in Ukraine’s arsenal that has the ability to take down ballistic missiles.
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