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

Published

3 years ago

January 21, 2023

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From an Iraqi-refugee who spoke no English to a multi-millionaire businessman and cabinet minister, Nadhim Zahawi’s story is one of the most compelling in Westminster.

But questions about his financial affairs are now front and centre, having first gained prominence during the Stratford-on-Avon MP’s 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.

When Nadhim Zahawi co-founded the polling firm YouGov in May 2000, the trust was allocated shares in the company equalling the number given to the other co-founder Stephan Shakespeare.

Asked about this by Kay Burley last year, the then chancellor said neither he nor his wife benefit from the Gibraltar trust and denied it was used to avoid tax, saying it was simply because his father “lived abroad”.

The cabinet minister has also suggested the trust held the shares because his father was involved in setting up the company, had put money into it and had provided guidance.

Those working at YouGov at the time said Hareth Zahawi was helpful, albeit in an informal way, while others at the firm said he was not involved beyond being a shareholder.

Evidence from 2005 also appears to show – at that point, before he became an MP – Nadhim Zahawi was benefitting from this offshore trust.

A financial document published by YouGov sets out that a dividend payment that was due to go to Balshore instead was used to pay off loans owed by Mr Zahawi.

Potential tax saving uncovered

Much of this detail was first uncovered by Dan Neidle – a lawyer who used to work for a top corporate and now runs a not-for-profit focussed on tax policy.

Tory sources have briefed that Mr Neidle – who is a Labour member – is a “Labour activist” and the allegations are merely taken from his “blog”.

This comes after lawyers acting for Mr Zahawi sent Mr Neidle a series of letters last year threatening legal action if he continued to publish analysis of the Tory MP’s financial affairs.

After digging through pages of documents, Mr Neidle had suggested there would have been a potential tax saving of several million pounds when Balshore sold its YouGov shares.

That’s because they were held in an offshore trust rather than by Mr Zahawi directly, and hence not eligible for capital gains tax.

It’s this figure that is at the centre of the repayment to HMRC.

On Friday, the Guardian newspaper suggested Mr Zahawi reached a settlement with the exchequer that reflected the fact he should have paid tax on the sale of these shares at the time.

Nadhim Zahawi’s statement in full

“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.

“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.

“Additionally, HMRC agreed with my accountants that I have never set up an offshore structure, including Balshore Investments, and that I am not the beneficiary of Balshore Investments. 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.”

Tax affairs up to date

Mr Zahawi has now confirmed that tax was repaid saying that HMRC had concluded his father was not entitled to the share allocation handed to him when YouGov was created.

The Tory chairman said this was a “careless and not a deliberate error” and didn’t confirm if any penalty was also levied.

He also re-stated that he was not a beneficiary of Balshore Investments and had never set up an offshore structure.

However, this intervention clashes somewhat with previous assertions that his tax affairs “were and are fully up to date”.

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It also looks somewhat awkward given his attempts to silence those looking into his tax affairs and his statement to Sky News last year that people were trying to “smear” him over his business dealings.

There are also still unanswered questions, including the pointed one of whether someone who was chancellor a matter of months ago was issued with a penalty by HMRC for failing to pay the right amount of tax.

World

At least 20 dead and 150 injured after magnitude 6.3 earthquake in north Afghanistan

Published

3 mins ago

November 3, 2025

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At least 20 dead and 150 injured after magnitude 6.3 earthquake in north Afghanistan

At least 20 people have died after a magnitude 6.3 earthquake in Afghanistan, the Taliban has said.

The tremor was recorded near the city of Mazar-e Sharif, in the northern Balkh province, at around 12.59am on Monday (8.29pm in the UK).

The Taliban Health Ministry added that 320 were injured, while ministry spokesperson Sharfat Zaman said that the numbers of dead and injured might rise.

The US Geological Survey (USGS) has issued an orange alert on its system of quake impacts, and suggested that “significant casualties are likely and the disaster is potentially widespread”.

Previous events at that alert level have required a regional or national level response, according to the USGS’s alert system.

Balkh province spokesperson Haji Zaid added that the earthquake destroyed part of the city’s holy shrine, known as the Blue Mosque.

The United Nations in Afghanistan said on X that it is on the ground assessing needs and delivering aid, and that: “We stand with the affected communities and will provide the necessary support.”

Mazar-e Sharif is the fifth-largest city in Afghanistan, with a population of around 523,000.

Located on two major active fault lines, Afghanistan is particularly vulnerable to earthquakes: More than 1,400 people were killed and at least 3,250 others injured after a magnitude 6.0 earthquake hit the country’s eastern regions in September.

That tremor wiped out villages in the Mazar Dara valley, which Sky’s Asia correspondent Cordelia Lynch visited in October.

In 2015, an earthquake struck northeastern Afghanistan, killing several hundred people in Afghanistan and nearby northern Pakistan.

Four large earthquakes also struck in the Herat province in 2023, each magnitude 6.3. The Taliban said at the time that at least 2,445 people had died.

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World

Hurricane Melissa leaves 28 dead after tearing through Jamaica

Published

1 day ago

November 2, 2025

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Hurricane Melissa leaves 28 dead after tearing through Jamaica

A total of 28 people have died following Hurricane Melissa’s rampage across Jamaica, the government has confirmed.

Melissa, one of the strongest storms on record to make landfall in the Caribbean, brought with it winds of up to 185mph when it hit the island earlier this week.

The Red Cross described it as a “disaster of unprecedented catastrophe”.

Melissa ravaged through Jamaica, Haiti, the Dominican Republic, and Cuba.

It weakened by the time it reached Cuba on Wednesday morning but still brought devastation – with houses collapsed and roads blocked.

A statement from the government of Jamaica said it was “deeply saddened to confirm 28 fatalities associated with the passage of Hurricane Melissa”.

It went on: “We extend heartfelt condolences to the families, friends, and communities mourning their loved ones.”

Eyewitness: ‘Send help’ – the desperate pleas from Hurricane Melissa survivors

The confirmation came as the first British repatriation flight was setting off from the island on Saturday evening local time.

The flight, chartered by the Foreign, Commonwealth and Development Office, was for those “unable to leave Jamaica on commercial routes”.

Essential relief supplies are now rolling into some of the hardest hit areas.

The UK government is mobilising an additional £5m in emergency humanitarian funding – on top of £2.5m announced earlier this week – to support the region’s recovery.

This new funding will enable the UK to send humanitarian supplies – including more than 3,000 shelter kits and over 1,500 solar-powered lanterns to help those whose homes have been damaged and those without power.

The UK is working with the World Food Programme and Red Cross, to ensure emergency relief reaches those who need it most.

At least 25 people died in the southern Haitian coastal town of Petit-Goave after the La Digue river burst its banks as a result of the hurricane, according to the town’s mayor Jean Bertrand Subreme.

World

Ukrainian troops ‘start surrendering’ in key city but Kyiv says situation ‘dynamic’

Published

1 day ago

November 1, 2025

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Ukrainian troops 'start surrendering' in key city but Kyiv says situation 'dynamic'

Ukrainian soldiers encircled by Russian forces in the key eastern city of Pokrovsk have started surrendering, the defence ministry in Moscow claims.

But Ukraine‘s military has pushed back on the report by the TASS state news agency, saying the situation is “difficult and dynamic”.

Kyiv has also claimed its positions in some districts of Pokrovsk have improved despite its city being infiltrated by Russian troops.

Latest: Russian attacks are ‘nuclear terrorism’, Ukraine warns

Ukraine is increasing its number of assault troops in the area, the 7th Rapid Response Corps said on Facebook.

And Ukrainian troops are also working to cut Moscow’s military logistics routes, it added.

The Russian defence ministry also said its forces defeated a team of Ukrainian special forces that headed to Pokrovsk in a bid to prevent Russian forces from advancing further into the city.

‘Footage of Ukrainian troops after surrendering’

It later posted videos of two Ukrainian troops who, it claimed, had surrendered.

The footage showed the men, one dressed in fatigues and the other in a dark green jacket, sat against a wall in a dark room, as they spoke of fierce fighting and encirclement by Russian forces.

The videos’ authenticity could not be independently verified, and there was no immediate public comment from Kyiv on the Russian ministry’s claims.

Ukraine’s President Volodymyr Zelenskyy has previously acknowledged that some Russian units had infiltrated the city. But he maintained that Ukraine is tackling them.

He said Russia had deployed 170,000 troops in Ukraine’s eastern Donetsk province, where Pokrovsk is located, in a major offensive to capture the city and claim a big battlefield victory.

‘Operation to destroy enemy forces’

Ukraine’s army chief Oleksandr Syrskyi said on Saturday the situation in Pokrovsk remained “hardest” for Ukrainian forces, who were trying to push Russian troops out.

But he insisted there was no encirclement or blockade as Moscow has claimed.

“A comprehensive operation to destroy and push out enemy forces from Pokrovsk is ongoing. The main burden lies on the shoulders of the units of the armed forces of Ukraine, particularly UAV operators and assault units,” Mr Syrskyi said.

Why is Pokrovsk important?

One of Moscow’s key aims has been to take all of Ukraine’s industrial heartland of coal-rich Donbas, which comprises of the Luhansk and Donetsk provinces. Kyiv still controls about 10% of Donbas.

Capturing Pokrovsk, which Russian media has dubbed “the gateway to Donetsk”, and Kostiantynivka to its northeast, would give Moscow a platform to drive north towards the two biggest remaining Ukrainian-controlled cities in Donetsk – Kramatorsk and Sloviansk.

‘Key Russian fuel pipeline struck’

Meanwhile, Ukraine’s military intelligence, known as HUR, has said its forces have hit an important fuel pipeline in the Moscow region that supplies the Russian army.

In a statement on Telegram, HUR said the operation late on Friday was a “serious blow” to Russia’s military logistics.

HUR said its forces struck the Koltsevoy pipeline, which is 250 miles long and supplies the Russian army with gasoline, diesel and jet fuel from refineries in Ryazan, Nizhny Novgorod and Moscow.

The operation, which targeted infrastructure near Ramensky district, destroyed all three fuel lines, HUR said.

The pipeline was capable of transporting up to three million tonnes of jet fuel, 2.8 million tonnes of diesel and 1.6 million tonnes of gasoline annually, HUR said.

Russia ‘targets gas production site’

Also overnight, Russia launched an attack on a gas production site in Poltava, in central Ukraine.

A fire broke out, the local administration said, but no injuries were reported.

Kyiv condemns ‘nuclear terrorism’

Ukraine’s foreign ministry has condemned Russian strikes this week on substations powering some of its nuclear plants.

It accused Russia of carrying out “targeted strikes on such substations” which “bear the hallmarks of nuclear terrorism”.

Elsewhere, a civilian died and 15 more were injured on Saturday morning after Russia struck the Mykolaiv region in southern Ukraine with a ballistic Iskander missile, local official Vitaliy Kim said.

A child was among those hurt in the strike, he added.