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

The fight for the Arctic – where climate change is giving Russia room to manoeuvre

Published

6 hours ago

May 29, 2025

admin

The fight for the Arctic - where climate change is giving Russia room to manoeuvre

The twin threats of climate change and Russian malign activity in the Arctic must be taken “deadly seriously,” David Lammy has warned.

Sky News joined him on the furthest reaching tour of the Arctic by a British foreign secretary.

We travelled to Svalbard – a Norwegian archipelago that is the most northern settled land on Earth, 400 miles from the North Pole.

It is at the heart of an Arctic region facing growing geopolitical tension and feeling the brunt of climate change.

Mr Lammy told us the geopolitics of the region must be taken “deadly seriously” due to climate change and “the threats we’re seeing from Russia”.

We witnessed the direct impact of climate change along Svalbard’s coastline and inland waterways. There is less ice, we were told, compared to the past.

The melting ice is opening up the Arctic and allowing Russia more freedom to manoeuvre.

“We do see Russia’s shadow fleet using these waters,” Mr Lammy said. “We do see increased activity from submarines with nuclear capability under our waters and we do see hybrid sabotage of undersea cables at this time.”

In Tromso, further south, the foreign secretary was briefed by Norwegian military commanders.

Vice Admiral Rune Andersen, the Chief of Norwegian Joint Headquarters, told Sky News the Russian threat was explicit.

“Russia has stated that they are in confrontation with the West and are utilising a lot of hybrid methods to undermine Western security,” he said.

But it’s not just Vladimir Putin they’re worried about. Norwegian observers are concerned by US president Donald Trump’s strange relationship with the Russian leader too.

Karsten Friis, a Norwegian defence and security analyst, told Sky News: “If he’s too soft on Putin, if he is kind of normalising relations with Russia, I wouldn’t be surprised.

“I would expect Russia to push us, to test us, to push borders, to see what we can do as Europeans.”

Changes in the Arctic mean new challenges for the NATO military alliance – including stepping up activity to deter threats, most of all from Russia.

In Iceland, we toured a NATO airbase with the foreign secretary.

There, he said maintaining robust presence in the Arctic was essential for western security.

“Let’s be clear, in this challenging geopolitical moment the high north and the Arctic is a heavily contested arena and we should be under no doubt that NATO and the UK need to protect it for our own national security.”

This is also about distracting Russia, drawing away resources that could have been used in the war in Ukraine and deterring it in the future.

Because the more Arctic opens up, the more this once pristine wilderness is becoming the arena of national rivalry and potentially conflict.

World

‘What did they do to be burned and bombed?’: Charity calls on UK to offer Gaza children life-saving treatment

Published

12 hours ago

May 29, 2025

admin

'What did they do to be burned and bombed?': Charity calls on UK to offer Gaza children life-saving treatment

A British charity has written to the prime minister and foreign secretary, urging them to allow seriously ill children from Gaza into the UK to receive life-saving medical treatment.

Warning: This article contains images readers may find distressing

The co-founder of Project Pure Hope told Sky News it was way past the time for words.

“Now, we need action,” Omar Dinn said.

He’s identified two children inside Gaza who urgently need help and is appealing to the UK government to issue visas as a matter of urgency.

Israel-Gaza latest: Netanyahu reportedly accepts US ceasefire plan

Britain has taken only two patients from Gaza for medical treatment in 20 months of Israeli bombardment.

“Most of the people affected by this catastrophe that’s unfolding in Gaza are children,” he continued. “And children are the most vulnerable.

“They have nothing to do with the politics, and we really just need to see them for what they are.

“They are children, just like my children, just like everybody’s children in this country – and we have the ability to help them.”

Sky News has been sent video blogs from British surgeons working in Gaza right now which show the conditions and difficulties they’re working under.

They prepare for potential immediate evacuation whilst facing long lists, mainly of children, needing life-saving emergency treatment day after day.

Dr Victoria Rose told us: “Every time I come, I say it’s really bad, but this is on a completely different scale now. It’s mass casualties. It’s utter carnage.

“We are incapable of getting through this volume. We don’t have the personnel. We don’t have the medical supplies. And we really don’t have the facilities.

“We are the last standing hospital in the south of Gaza. We really are on our knees now.”

One of her patients is three-year-old Hatem, who was badly burned when an Israeli airstrike hit the family apartment.

His pregnant mother and father were both killed, leaving him an orphan. He has 35 percent burns on his small body.

“It’s a massive burn for a little guy like this,” Dr Rose says. “He’s so adorable. His eyelids are burnt. His hands are burnt. His feet are burnt.”

Hatem’s grandfather barely leaves his hospital bedside. Hatem Senior told us: “What did these children do wrong to suffer such injuries? To be burned and bombed? We ask God to grant them healing.”

The second child identified by the charity is Karam, who, aged one, is trying to survive in a tent in deeply unhygienic surroundings with a protruding intestine.

He’s suffering from a birth defect called Hirschsprung disease, which could be easily operated on with the right skills and equipment – unavailable to him in Gaza right now.

Karam’s mother Manal told our Gaza camera crew: “No matter how much I describe how much my son is suffering, I wouldn’t be able to describe it enough. I swear I am constantly crying.”

Children are among the bulk of casualties – some 16,000 have been killed, according to the latest figures from local health officials – and make up the majority of those being operated on, according to the British surgical team on the ground.