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

Published

2 years ago

January 21, 2023

admin

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”.

Click to subscribe to the Sky News Daily wherever you get your podcasts

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

Why Ukraine’s European allies will be nervously watching VE Day events in Red Square

Published

9 hours ago

May 9, 2025

admin

Why Ukraine's European allies will be nervously watching VE Day events in Red Square

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.

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.

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.

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

Published

9 hours ago

May 9, 2025

admin

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).

👉Listen to The World with Richard Engel and Yalda Hakim on your podcast app👈

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.”

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.”

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.”

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”.

World

The demands and challenges facing the new pope

Published

9 hours ago

May 9, 2025

admin

The demands and challenges facing the new pope

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.

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.

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.

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.

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.

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.