Nadhim Zahawi says tax error was found to be ‘careless and not deliberate’ after calls for his sacking

Published

2 years ago

January 21, 2023

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Nadhim Zahawi says his tax error was found to be “careless and not deliberate” after Labour called for him to be sacked over his finances.

The Tory chairman and cabinet member released a statement saying he wanted to “address some of the confusion” about his finances.

He said his father took founder shares in YouGov and that HMRC later “disagreed about the exact allocation”, leading him to “settle the matter and pay what they said was due”.

“They concluded that this was a ‘careless and not deliberate’ error,” he said.

“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.”

‘I asked my father to help’

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”.

Mr Zahawi also said in his statement: “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. I’m incredibly proud of what we achieved. It is an amazing business that has employed thousands of people and provides a world-beating service.

“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.”

Mr Zahawi co-founded the polling company before entering politics, with shares kept in Balshore Investments, a Gibraltar-registered family trust.

The firm, which is headquartered in the UK, but has operations in Europe, North America, the Middle East and Asia-Pacific.

What do we know about Nadhim Zahawi’s tax affairs?

A ‘murky affair’

Pressure has been mounting on the 55-year-old politician to respond to questions over his tax affairs, however up to now he had refused to comment.

The Guardian first reported that he paid a 30% penalty, taking the estimated total tax bill to more than £4.8m.

Responding to his statement, Labour Party Chair, Anneliese Dodds MP, said: “This 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.

“In the middle of the biggest cost-of-living crisis in a generation, the public will rightly be astonished that anyone could claim that failing to pay millions of pounds worth of tax is a simple matter of ‘carelessness”.

Calling for his removal as Tory Party Chair, she said Mr Zahawi still had much to explain, including when he became aware of the investigation, and if he was Chancellor at the time.

She also said Prime Minister Rishi Sunak needed to “set the record straight immediately” clarifying exactly what he knew about the investigation into Mr Zahawi.

The PM should ‘do the right thing’

Ahead of his statement, Labour had renewed calls for the prime minister to take action, and sack Mr Zahawi.

Speaking at the Fabian Society conference on Saturday, Labour’s shadow chancellor Rachel Reeves said: “A few months ago… He was chancellor of the exchequer and responsible for Britain’s tax affairs and tax collection, and we now find that he wasn’t so keen to pay himself.

“So, if the prime minister wants to stick by his commitment for integrity, honesty and professionalism, he should do the right thing and sack Nadhim Zahawi.”

Mr Zahawi was chancellor between July and September last year, in the closing days of Boris Johnson’s premiership.

‘Proper transparency’

However, Deputy Prime Minister Dominic Raab defended Mr Zahawi, telling Sky News: “I can’t speak for the personal tax affairs of a colleague, but what I would say is that Nadhim has been very clear that he’s paid all the tax that he’s owed, that he’s paid it on time, that there’s nothing outstanding due, and I think that’s of course right and proper.

“If there’s further questions, of course, I’m sure there’ll be the proper transparency.”

Asked if Mr Zahawi will still be in his post in a month, Mr Raab said: “A month’s a long time in politics. I certainly hope so.”

A spokesman for Mr Zahawi previously said his taxes were “properly declared and paid in the UK” and the minister had “never had to instruct any lawyers to deal with HMRC on his behalf”.

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

The spotlight on Mr Zahawi’s tax affairs has rounded off a challenging week for the PM, who on Friday was fined by police for not wearing a seatbelt in the back of a moving car.

World

Inside a NATO base in Poland – as residents bordering Russia say ‘scare tactic’ is needed

Published

4 hours ago

April 10, 2025

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Inside a NATO base in Poland - as residents bordering Russia say 'scare tactic' is needed

Along the thin strip of beach and woodland known as the Vistula Spit which marks the northernmost demarcation between Poland and the Russian exclave of Kaliningrad, there is not much in the way of a border.

Just some torn wire fencing and a few rotten posts which seem to stagger drunkenly into the shallows of the Baltic Sea.

Beneath a sign barring entry, we find a couple of empty bottles of Russian cognac and vodka.

It doesn’t feel like the edge of NATO territory.

“I don’t see much protection. It’s not good,” says Krzysztof from Katowice, who has come to inspect the border himself.

“We have to have some kind of scare tactic, something to show that we are trying to strengthen our army,” says Grzegorz, who lives nearby.

“At the same time I think I would not base the defence of our country solely on our army. I am convinced that Europe or America, if anything were to happen, will help us 100%.”

Poland is investing massively in its defence, with military spending set to hit 4.7% of GDP in 2025, more than any other NATO country.

Polish Prime Minister Donald Tusk has said he will introduce voluntary military training for men of any age, and women too should they wish, so the army has a competent reserve force in the event of war.

He is investing $2.5bn in stronger border fortifications between Russia and Belarus, a project called East Shield which will include anti-tank obstacles, bunkers and potentially minefields too.

Along with its Baltic neighbours, Poland is withdrawing from the Ottawa convention against the use of land mines. It hasn’t committed to using them, but it wants to have that option.

We’ve been granted access to one of the cornerstones of Polish, and European defence, which is a couple of hours drive from the Vistula spit at the Redowicze military base.

Aegis Ashore Poland, together with its sister site in Romania, are the land-based arms of NATO’s missile defence shield over Europe, which is run by the US navy.

They are symbols of the US commitment to NATO and to the protection of Europe.

And despite changes at the top of the Pentagon it is “business as usual”, says Captain Michael Dwan who oversees air and missile defence within the US Sixth Fleet.

“Our mission to work with NATO forces has been unchanged. And so our commitment from the United States perspective and what capability we bring to ballistic missile defence and the defence of NATO is championed here in Poland.”

As far as Russia is concerned, NATO’s two missile defence bases in Romania and Poland represent a NATO threat on their doorstep and are therefore a “priority target for potential neutralisation”, per Russia’s foreign ministry.

NATO says the installations are purely defensive and their SM-3 interceptor missiles are not armed and are not intended to carry warheads. Russia counters they could easily be adapted to threaten Russia.

Not the case, Captain Dwan says.

“It’s not a matter of moving offensive weapons here into the facility, the hardware and the infrastructure is simply not installed.

“It would take months or years to change the mission of this site and a significant amount of money and capability and design.”

With so much marked “secret” on the site, it seems amazing to be granted the access.

But for NATO, transparency is part of deterrence. They want potential adversaries to know how sophisticated their radar and interception systems are.

They know that if they carried warheads on site, that would make them a target so they don’t.

Deterrence also depends on whether potential adversaries believe in the US’s commitment to NATO and to Europe’s defence.

On an operational level, as far as the troops are concerned, that commitment may still be iron-clad.

But as far as its commander-in-chief goes, there is still – as with so much around Donald Trump’s presidency – a great deal of uncertainty.

In the Oval Office on Wednesday afternoon President Trump suggested he might bundle a potential US troop drawdown in Europe together with the issue of EU trade and tariffs.

“Nice to wrap it up in one package,” he said, “it’s nice and clean”.

Probably not the way Europe sees it, not with a resurgent Russia on their doorstep, economic tailwinds breeding animosity and the notion of Pax Americana crumbling at their feet.

World

Asianmarkets bounce back after Trump pauses higher tariffs for most countries – despite increasing those on China to 125%

Published

10 hours ago

April 10, 2025

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Asianmarkets bounce back after Trump pauses higher tariffs for most countries - despite increasing those on China to 125%

Asian markets have reacted positively after Donald Trump paused his so-called “reciprocal” tariffs on most of America’s trading partners for 90 days, despite the US president increasing those on China to 125%.

There have been fears of a global recession and stock markets around the world had plummeted after Mr Trump announced his “Liberation Day” tariffs on Wednesday 2 April.

However, Japan’s Nikkei share average was up 8.2% by 3.50am BST, while the broader Topix had risen 7.5%.

Similarly, the S&P 500 stock index had jumped 9.5% and global markets bounced back following Mr Trump’s announcement on Wednesday that the increased tariffs on nearly all trading partners would now be paused.

Tariffs latest: Trump gives reasons for pausing some tariffs

In a post on his Truth Social platform, Mr Trump said the “90-day pause” was for the “more than 75 countries” who had not retaliated against his tariffs “in any way”.

He added that during this period they would still have to pay a “substantially lowered” 10% tariff, which is “effective immediately”.

It is lower than the 20% tariff that Mr Trump had set for goods from the European Union, 24% on imports from Japan and 25% on products from South Korea.

The UK was already going to face a blanket 10% tariff under the new system.

Mr Trump said the increased 125% tariff on imported goods from China was “effective immediately”.

He added: “At some point, hopefully in the near future, China will realise that the days of ripping off the USA, and other countries, is no longer sustainable or acceptable.”

What’s in Trump’s tariff pause?

Here’s what Donald Trump’s tariff pause entails:

‘Reciprocal’ tariffs on hold

• Higher tariffs that took effect today on 57 trading partners will be paused for 90 days

• These include the EU, Japan and South Korea, all of which will face a baseline 10% duty instead

• Countries that already had a 10% levy imposed since last week – such as the UK – aren’t affected by the pause

China tariffs increased

• Trump imposed a higher 125% tariff on China

• That’s in addition to levies he imposed during his first term

• China had hit the US with 84% tariff earlier today, following tit-for-tat escalations

No change for Canada or Mexico

• Canadian and Mexican goods will remain subject to 25% fentanyl-related tariffs if they don’t comply with the US-Mexico-Canada trade agreement’s rules of origin

• Compliant goods are exempt

Car and metal tariffs remain

• Trump’s pause doesn’t apply to the 25% tariffs he levied on steel and aluminium in March and on cars (autos) on 3 April

• This 25% tariff on car parts does not come into effect until 3 May

Sectors at risk

• Copper, lumber, semiconductors, pharmaceuticals and critical minerals are expected to be subject to separate tariffs, in the same way autos are

Hours after Mr Trump announced the pause on tariffs for most countries, a White House official clarified that this did not apply to the 25% duties imposed on some US imports from Mexico and Canada.

The tariffs were first announced in February and Mexico and Canada were not included in the “Liberation Day” announcements.

Hours before the 125% tariff on China was revealed, Beijing said it was increasing tariffs on US goods by 50%.

It meant tariffs of 84% would be enforced on US goods – up from the 34% China had previously planned.

China ‘want to make a deal’

Asked why he posted “BE COOL” on Truth Social hours before announcing his tariff pause, Mr Trump told reporters at the White House: “I thought that people were jumping a little bit out of line.”

“They were getting yippy, you know, were getting a little bit yippy, a little bit afraid,” he added.

Mr Trump continued: “China wants to make a deal, they just don’t know how to go about it.

“[They’re] quite the proud people, and President Xi is a proud man. I know him very well, and they don’t know quite how to go about it, but they’ll figure it out.

“They’re in the process of figuring out, but they want to make a deal.”

White House press secretary Karoline Leavitt said the walk back was part of a grand negotiating strategy by Mr Trump.

“President Trump created maximum negotiating leverage for himself,” she said, adding that the news media “clearly failed to see what President Trump is doing here”.

US Treasury Secretary Scott Bessent also insisted Mr Trump had strengthened his hand through his tariffs.

“President Trump created maximum negotiating leverage for himself,” he said.

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Mr Bessent said Mr Trump decided to raise tariffs on China because Beijing hadn’t reached out to the US and instead increased its own levies on US goods.

Downing Street said that the UK will “coolly and calmly” continue its negotiations with the US.

A Number 10 spokeswoman said: “A trade war is in nobody’s interests. We don’t want any tariffs at all, so for jobs and livelihoods across the UK, we will coolly and calmly continue to negotiate in Britain’s interests.”