Nadhim Zahawi says tax error was found to be ‘careless and not deliberate’ after calls for his sacking
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?
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Shadow chancellor Rachel Reeves calls for Nadhim Zahawi to be sacked
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.
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Deputy Prime Minister Dominic Raab defends his Tory colleague
‘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.
Donald Trump has a soft spot for military spectacles and autocrats.
He will be looking on with envy as Vladimir Putin parades both in Moscow today, with Chinese leader Xi Jinping flying in to join Victory Day events in Red Square.
European allies of Ukraine will be watching nervously, wary of anything that could upturn the delicate quest for peace.
President Trump‘s patience with peddling his much vaunted “peace deal” has been wearing thin and allies had feared Ukraine could be punished for it.
That would have been grotesquely unfair, of course. Ukraine has bent over backwards to accommodate Mr Trump’s one-sided diplomacy that has so far seemed to favour the aggressor in this obscene war.
Pic: AP
True, the Trump proposal does not agree to Russian annexation of all the land already taken by force and stops short of ordering the complete demilitarisation of Ukraine, but otherwise the proposals are pretty much everything that Moscow has asked for.
The deal is being pushed by Steve Witkoff, Mr Trump’s golf partner turned chief negotiator, a man regarded by diplomats as out of his depth and lost in the rough when it comes to the arts of statecraft.
Like his president, Mr Witkoff has a history of doing business with Russian oligarchs, an apparently starry-eyed view of the Russian leader and has called Ukraine a “false country”.
Moment of truth approaching
Mr Witkoff and Mr Trump have so far given Mr Putin the benefit of the doubt, but a moment of truth is approaching. While Ukraine has agreed to a longer ceasefire in principle, Mr Putin will not.
Ukraine’s European allies feared that Mr Trump was about to despair of progress, blame Ukraine and take US military support with him.
Then came the minerals agreement between the US and Ukraine. The breakthrough gave the US president something to show for his efforts and assuaged his desire for some kind of deal. He seems to have moved on for now, at least, and approved the first $50m of arms sales to Ukraine.
Members of the Russian Air Force fly over Red Square during the rehearsal. Pic: AP
But these remain a tense few days ahead with plenty at stake.
Mr Putin’s self-declared three-day ceasefire raises the spectre paradoxically of escalation if either side breaks it.
The Russian lull is seen here in Kyiv as little more than a ploy.
If the Russian leader was serious about giving peace a chance, they say, he would have signed up to the permanent ceasefire being proposed by the Trump team.
Besides, Russia broke the last truce in Easter as soon as it had begun and used it to carry out surveillance and reinforcement operations says Kyiv. Why risk another pointless pause that is exploited by the invaders?
Escalation possible
If Russia plays the same games this time and Ukraine retaliates, there could be a significant escalation. Likewise, with any Ukrainian drone attack on Moscow during Victory Day.
Any major flare-up will not be looked on favourably by the US president if it upstages his first trip abroad this presidency, a three-day tour of the Middle East.
For now, his attention is not so much on the Ukraine conflict and he is no longer issuing threats to walk away and stop supporting the Ukrainians.
Russian servicemen march towards Red Square in the rehearsal. Pic: AP
Read more from Sky News:
Ukraine and Russia accuse each other of breaching ceasefire
Putin prepares to host dozens of world leaders for Victory Day parade
That will be a relief here in the Ukrainian capital. They would be unwise to do anything to reengage him, for now at least.
Their European allies, though, know American involvement in this war appears to be receding.
Can they fill the vacuum?
This week, they remember the sacrifices made to bring peace and security to their continent 80 years ago.
Can they find the political will and unity to do so again, even without America?
Astonishingly, given all we have been through, that is still an open question.
World
India will respond ‘in exactly the same light’ if Pakistan retaliates, high commissioner tells Sky News
India will respond to any escalation from Pakistan “proportionally and in exactly the same light”, the country’s high commissioner has told Sky News.
Weeks after 26 tourists were shot dead by gunmen in Indian-controlled Kashmir last month, India carried out missile strikes in Pakistan and Islamabad-administered parts of the disputed region.
On Wednesday, India said it hit nine “terrorist infrastructure” sites, while Pakistan said it was not involved in the April attack and the sites were not militant bases.
Pakistan’s Prime Minister Shehbaz Sharif has since vowed that India will “now have to pay the price” for their “blatant mistake,” and skirmishes have also been reported along the Line of Actual Control (LAC).
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Speaking to Sky’s The World with Yalda Hakim on Thursday, India’s high commissioner to the UK, Vikram Doraiswami, said “the original escalation is Pakistan’s sponsored terror groups’ attack on civilians”.
India strikes ‘reasonable,’ says high commissioner
He then insisted India’s strikes in Pakistan and Kashmir were “precise, targeted, reasonable and moderate,” adding: “It was focused principally and solely on terrorist infrastructure.
“We made it abundantly clear that the object of this exercise was clearly to avoid military escalation.
“A fact that was actually acknowledged – in a left-handed way of course – by the Pakistani side in terms of their own statements, which said the airspace hadn’t been violated.”
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India awaits Pakistan’s response
Pakistan chose ‘to escalate the matter’
The high commissioner also said about claims Pakistan shot down Indian aircraft with Chinese-made fighter jets: “If it satisfies Pakistan’s ego to say that they’ve done something, they could have used that as an off-ramp to move on.
“Clearly they’ve chosen not to, and they’ve chosen to escalate the matter.”
A boy collects papers from the debris of a damaged house in Gingal village. Pic: Reuters
And when asked about Pakistan’s threats of retaliation, Mr Doraiswami said: “We’re not looking for an escalation, but if Pakistan responds, as we have done, we will respond proportionally and in exactly the same light.”
He then referenced the border skirmishes, saying: “I do want to remind everybody: For the last 15 days, they’ve also opened artillery fire along the Line of Actual Control… That’s led to civilian casualties.”
Read more:
The story of India and Pakistan’s deadly conflict
How India and Pakistan’s militaries match up
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
It comes after India said Pakistan attacked its military stations in the Kashmir region with drones and missiles on Thursday.
The country’s defence ministry said stations at Jammu, Pathankot and Udhampur were “targeted by Pakistani-origin” weapons, and added “the threats were swiftly neutralised”.
There is a long list of demands in the new pope’s in-tray, ranging from the position of women in the church to the ongoing fight against sexual abuse and restoring papal finances.
People both inside the Catholic Church and around the world will be watching how the new pontiff deals with them.
US Cardinal Robert Francis Prevost was elected as the new pope on Thursday after just two days of conclave.
The 69-year-old, who becomes the first American pope, will take the name Leo XIV.
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‘Evil will not prevail, we are all in the hands of God’, the new American Pope told the crowd.
On Friday, Pope Leo will lead his first holy mass as pontiff after already paying a surprise visit to see staff at his former residence.
Here, Sky News Europe correspondent Siobhan Robbins takes an in-depth look at the challenges facing the new pontiff.
Sexual abuse
Many Catholic insiders credit Pope Francis with going further than any of his predecessors to address sexual abuse.
He gathered bishops together for a conference on the issue in 2019 and that led to a change that allows cooperating with civil courts if needed during abuse cases.
But it didn’t go as far as forcing the disclosure of all information gathered in relation to child abuse.
Any abuse allegations must now be referred to church leaders, but reformers stopped short of decreeing that such cases should also be automatically referred to the police.
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Clerical abuse victim says church still has ‘so much to do’
While many abuse victims agree they saw progress under Pope Francis, who spent a lot of time listening to their accounts, they say reforms didn’t go far enough.
The next pope will be under pressure to take strong action on the issue.
Newly-elected Pope Leo XIV appears on the balcony of St Peter’s Basilica at the Vatican. Pic: Reuters
Women
Pope Francis also did more to promote women in the Vatican than any other pontiff.
Two years ago, he allowed women to vote in a significant meeting of bishops.
While he was clear he wanted women to have more opportunities, he resisted the idea that they needed to be part of the church hierarchy and didn’t change the rules on women being ordained.
A woman kneels at St. Peter’s Square, on the first day of the conclave to elect the new pope. Pic: Reuters
His successor will need to decide if they push this agenda forward or rein it back in.
It’s a pressing concern as women do a huge amount of the work in schools and hospitals, but many are frustrated about being treated as second-class citizens. 10,000 nuns a year have left in the decade from 2012 to 2022, according to Vatican figures.
Inclusion
“Who am I to judge?” Pope Francis famously said when asked about a gay monsignor in 2013.
His supporters say he sought to make the church more open, including allowing blessings for same sex couples but while critics argue he didn’t go far enough, some conservatives were outraged.
A gay couple kiss at a Catholic protest against the legalisation of gay marriage in Mexico. File pic: Reuters
African bishops collectively rejected blessings for same sex couples, saying “it would cause confusion and would be in direct contradiction to the cultural ethos of African communities”.
How welcome LGBTQ+ people feel in the church will depend partly on decisions made by the pontiff.
Conversely, the Pope must also bring together disparate groups within the Catholic faith.
Many are demanding a leader who can unite the various factions and bring stability in an increasingly unstable world.
The global south
While the Catholic church is losing members in its traditional base of Europe, it’s growing rapidly in the global south.
The area has become the new centre of gravity for Catholicism with huge followings in countries like Brazil, Mexico and the Philippines.
Pope Francis tried to expand representation by appointing more cardinals from different areas of the world, and the new Pope will be expected to continue this.
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Behind the scenes at the conclave
Finance
The Vatican is facing a serious financial crisis.
The budget deficit has tripled since Pope Francis’s election and the pension fund has a shortfall of up to €2bn (£1.7bn).
These money worries, which were compounded by COVID-19 and long-standing bureaucratic challenges, represent a major concern for the next pope.
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