Nadhim Zahawi’s tax affairs: What did the Conservative Party chairman do?

Published

2 years ago

January 25, 2023

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The chairman of the Conservative Party, Nadhim Zahawi, is currently under investigation over his multimillion-pound tax dispute.

On Monday, Prime Minister Rishi Sunak asked new ethics adviser Sir Laurie Magnus to assess whether the cabinet minister breached the ministerial code with the HMRC settlement he made while he was chancellor.

“Clearly in this case there are questions that need answering,” he told reporters.

Mr Zahawi has said he is “clearly being smeared” over questions about his tax affairs – and that he did not “benefit” from an “offshore trust”.

Mr Sunak is under increasing pressure to remove Mr Zahawi from his senior cabinet post.

But what do we know about the matter so far?

Who is Nadhim Zahawi?

Mr Zahawi, the chairman of the Conservative Party, was previously an aide to Conservative peer Lord Archer and – with another aide Stephan Shakespeare – founded polling company YouGov at the turn of the millennium.

In 2010, setting his sights firmly back on politics, he became MP for Stratford-upon-Avon.

He secured his first junior minister post – education minister – in 2018, but became a household name after COVID broke out in the UK and he was appointed by former PM Boris Johnson as vaccine minister.

‘Game over’ for Zahawi – politics latest

The performance propelled him to cabinet and in September 2021, he took his first secretary of state post, back in the Department for Education.

He was propelled further to chancellor in the dying days of Mr Johnson’s premiership after the resignation of Rishi Sunak.

Mr Zahawi made an unsuccessful bid to become PM following Mr Johnson’s removal – losing out to Liz Truss – but was appointed Chancellor of the Duchy of Lancaster.

He became chairman of the Tory Party just weeks later when Ms Truss’s premiership came crashing down and Mr Sunak gained the keys to Number 10.

What is the controversy about?

In January 2023, The Sun On Sunday published a report claiming Mr Zahawi had paid a seven-figure sum to settle a dispute with HMRC over the sales of his YouGov shares.

The shares, worth an estimated £27m, were held by Balshore Investments, a company registered offshore in Gibraltar linked to Mr Zahawi’s family.

Sky News understands that, as part of a settlement with HMRC, Mr Zahawi paid a penalty to the tax collector.

The exact size of the settlement has not been disclosed, but it is reported to be an estimated £4.8m, including a 30% penalty.

By Monday, Mr Sunak had ordered a potentially far-reaching investigation into Mr Zahawi to be conducted by the PM’s new ethics adviser Sir Laurie Magnus.

Sir Laurie is expected to focus on whether the cabinet minister breached the ministerial code with the estimated £4.8m HMRC settlement he made while he was chancellor, but it could extend to his prior tax arrangement and whether he lied to the media.

It is unclear what the prime minister knew about Mr Zahawi’s dealings with the tax office when he appointed him to his cabinet in October.

Sources close to Mr Zahawi have said he is “absolutely not standing down”.

What has Zahawi said?

Last July, it was reported that HMRC was investigating Mr Zahawi’s tax affairs – but a spokesperson for him at the time said he was “not aware of any formal investigation by HMRC” and insisted “his taxes are fully paid and up to date”.

The next day, allegations arose that concerns had been raised by officials over Mr Zahawi’s tax affairs before his appointment as a minister in Mr Johnson’s cabinet.

When the issue of his tax affairs came up in an interview with Sky News as Mr Zahawi prepared to launch his leadership bid, Mr Zahawi said: “I was clearly being smeared.

“I was being told that the Serious Fraud Office, that the National Crime Agency, that HMRC are looking into me. I’m not aware of this.”

It is unclear when Mr Zahawi first knew about the probe by HMRC, but his allies have said he told the Cabinet Office’s propriety and ethics team about the matter before his appointment.

Over the weekend, Mr Zahawi said HMRC concluded there had been a “careless and not deliberate” error in the way the founders’ shares, which he had allocated to his father, had been treated.

In a statement on Monday, following the PM’s announcement of an investigation into the matter, he added: “I am confident I acted properly throughout and look forward to answering any and all specific questions in a formal setting to Sir Laurie.”

Mr Zahawi has not confirmed how much his penalty amounted to or the value of the overall settlement with HMRC.

What has the prime minister said?

The prime minister has ordered his ethics adviser to investigate whether Mr Zahawi broke ministerial rules over the estimated £4.8m bill.

A week ago, Mr Sunak told MPs that Mr Zahawi had “already addressed the matter in full” – but Downing Street subsequently revealed the PM had not been aware that the Conservative Party chairman had paid a penalty to HMRC as part of the settlement.

Mr Sunak admitted there are “questions that need answering” as the inquiry was launched, and it is unclear what he knew when appointing Mr Zahawi to the cabinet-attending role.

Downing Street subsequently suggested Mr Sunak did not know last week that Mr Zahawi had paid a reported 30% penalty to HMRC.

Probed on the matter by Labour leader Sir Keir Starmer at PMQs on Wednesday, the PM said: “The issues in question occurred before I was prime minister.

“With regard to the appointment of the minister without portfolio, the usual appointments process was followed, no issues were raised with me when he was appointed to his current role, and since I commented on this matter last week, more information has come forward.

“That is why I have asked the independent adviser to look into the matter.

“I obviously can’t prejudge the outcome of that but it is right that we fully investigate this matter and establish all the facts.”

Mr Sunak has so far resisted growing calls to remove Mr Zahawi from his current post.

Who has called for him to go?

Former minister Caroline Nokes said there were “too many unanswered questions” over the tax row as she called for Mr Zahawi to “stand aside and let the investigation run its course”.

Speaking to Sky News on Tuesday, Lord Hayward agreed that the Tory Party chairman should think about “standing aside” while parliament’s ethics watchdog investigates his tax affairs.

“We don’t know what the timescales are for the inquiry, and I think that’s key,” he said.

“I think he should be considering whether he stands aside for the period of the inquiry.”

But Home Office minister Chris Philp said on Monday that Mr Zahawi should be treated as “innocent until proven guilty” and it is “reasonable” for him to continue as party chairman.

“The investigation has been launched by the prime minister; that is the right thing to do. It will get to the bottom of this and then the prime minister will make his decision,” he said.

“But I don’t think it is fair to jump to any conclusions before the investigation has concluded.”

Labour said Mr Zahawi’s admitted carelessness should see him removed from government.

Shadow foreign secretary David Lammy told Sky News: “When you’ve been chancellor of the exchequer and you said you’ve been careless despite the fact that offshore trusts have been set up in Gibraltar, I’m sorry, you really ought to resign or be sacked.”

What does this mean for the PM?

The Zahawi tax affairs saga formed one of two controversies Mr Sunak has been forced to confront this week, with questions also being raised over the decision to appoint Richard Sharp as BBC chairman while he reportedly helped former Number 10 incumbent Mr Johnson secure a loan of up to £800,000.

The PM has also distanced himself from this allegation, saying the chairman’s appointment was made by “one of my predecessors”.

But these two incidents add to what has been a turbulent first few months in Number 10 for Mr Sunak.

On his first day as PM in October, Mr Sunak vowed to restore “integrity and accountability” to government – a promise which has now been called into question by a series of events.

A few days after entering Number 10, the PM was forced to defend re-appointing Suella Braverman as home secretary days after she quit over data breaches.

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Labour leader Sir Keir Starmer accused the new PM of doing a “grubby deal” with Ms Braverman to secure her support in the Tory leadership contest.

An independent probe was also launched into the conduct of another cabinet member – Deputy Prime Minister Dominic Raab – after he was subject to multiple complaints of bullying.

Mr Sunak initially stood by the justice secretary – who he reappointed to the role in the autumn – but eventually bowed to pressure to allow the formal probe.

On top of this, the prime minister received a second police fine last week, this time for failing to wear a seatbelt.

The first was received last year after he broke coronavirus rules during the partygate scandal.

World

Donald Trump says he has call with Putin planned – as Ukraine condemns Russia over bus attack

Published

22 mins ago

May 18, 2025

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Donald Trump says he has call with Putin planned - as Ukraine condemns Russia over bus attack

Donald Trump has said he will speak to Vladimir Putin and Volodymyr Zelenskyy separately on Monday in a bid to secure a ceasefire deal between Russia and Ukraine.

The US president made the announcement on Truth Social – shortly after the Ukrainian president condemned Russia for the “deliberate killing of civilians” after a drone hit a bus in north-eastern Ukraine.

Mr Trump said he will speak to Mr Putin over the phone. He will then talk with Mr Zelenskyy and “various members of NATO”, he wrote.

In an all-caps post, he said: “HOPEFULLY IT WILL BE A PRODUCTIVE DAY, A CEASEFIRE WILL TAKE PLACE, AND THIS VERY VIOLENT WAR, A WAR THAT SHOULD HAVE NEVER HAPPENED, WILL END. GOD BLESS US ALL!!!”

The Ukrainian town of Bilopillia today declared a period of mourning lasting until Monday after nine people were killed in a Russian drone attack – which occurred just hours after Kyiv and Moscow held peace talks.

Seven others were injured, Ukrainian authorities said. The bus was evacuating civilians from a frontline area when the drone hit, the country’s national police said.

A “father, mother and daughter” were among the dead, Mr Zelenskyy said, writing on Telegram: “All the deceased were civilians. And the Russians could not have failed to understand what kind of vehicle they were targeting.”

The attack has also been condemned by British Foreign Secretary David Lammy, who said he was “appalled”.

“If Putin is serious about peace, Russia must agree to a full and immediate ceasefire, as Ukraine has done,” he wrote on X.

Representatives for Kyiv and Moscow met for direct peace talks in Istanbul, Turkey, just hours before the drone attack.

While the discussions – which were not attended by the Mr Putin or Mr Zelenskyy – did not result in a truce, both countries agreed to exchange 1,000 prisoners in their biggest swap yet.

Ukraine’s intelligence chief, Kyrylo Budanov, said on national television the exchange could happen as early as next week.

Russia ‘threatened eternal war’ at peace talks

After a Ukrainian official yesterday said Russia made “unacceptable” demands during the discussions, a source from the Kyiv delegation has now told Sky News that Moscow threatened “eternal war”.

Separately, a senior Kyiv official said Russia’s proposed ceasefire terms included the full withdrawal of troops from four regions of Ukraine: Donetsk, Zaporizhzhia, Kherson and Luhansk.

Moscow also called for international recognition that those regions and Crimea – annexed in 2014 – are Russian and for Ukraine to become a neutral state, with no allied troops stationed there, they said.

The Kremlin declined to comment on the matter.

Ukraine has rallied support from its allies following the talks, and a number have spoken out.

French President Emmanuel Macron said: “Today, what do we have? Nothing. And so I tell you, faced with President Putin’s cynicism, I am sure that President Trump, mindful of the credibility of the United States, will react.”

The EU is working on a new package of sanctions against Moscow, European Commission President Ursula von der Leyen said.

World

Israel and Hamas resume ceasefire talks after ‘extensive strikes’ on Gaza

Published

3 hours ago

May 17, 2025

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Israel and Hamas resume ceasefire talks after 'extensive strikes' on Gaza

Israel and Hamas said ceasefire talks have resumed in Qatar – even as Israeli forces ramped up a bombing campaign and mobilised for a massive new ground assault.

Earlier, the Israeli military said it had been “conducting extensive strikes and mobilising troops” as part of preparations to expand operations in Gaza.

Israel’s defence minister Israel Katz said Hamas had “refused to discuss negotiations without a cessation of the war”, but after the airstrikes and the mobilisation of forces the militant group’s representatives “have agreed to sit in a room and seriously discuss the deal”.

“Israel emphasises that if the talks do not progress, the [military] operation will continue,” he added.

A Hamas source told Sky News that ceasefire talks began in Doha on Saturday morning.

Hamas official Taher al-Nono told Reuters news agency that the two sides were involved in discussions without “pre-conditions”.

He added Hamas was “keen to exert all the effort needed” to help mediators make the negotiations a success.

More than 150 people have been killed in Israeli strikes in the last 24 hours, according to the Hamas-run health ministry in Gaza.

This week has been one of the deadliest phases of bombardment since a truce collapsed in March and marked a significant escalation in Israel’s offensive.

The Israeli military’s preparations to expand operations in Gaza have included the build-up of tanks and troops along the border.

It is part of “Operation Gideon Chariot”, which Israel says is aimed at defeating Hamas and getting its hostages back.

An Israeli defence official said earlier this month that the operation would not be launched before Donald Trump concluded his visit to the Middle East.

The US president ended his trip on Friday, with no apparent progress towards a new peace deal.

Meanwhile, on Saturday, leaders at the annual summit of the Arab League in Baghdad said they were trying to reach a ceasefire between Israel and Hamas in Gaza.

They also promised to contribute to the reconstruction of the territory once the war stops.

The meeting comes two months after Israel ended a ceasefire reached with the Hamas militant group.

Israel’s Prime Minister Benjamin Netanyahu said on 5 May that Israel was planning an expanded, intensive offensive against Hamas as his security cabinet approved plans that could involve seizing Gaza and controlling aid.

This week, Israel said it had bombed the European Hospital because it was home to an underground Hamas base, but Sky News analysis has cast doubt on its evidence.

Israel’s goal is the elimination of Hamas, which attacked southern Israel on 7 October 2023, killing around 1,200 people and seizing about 250 hostages.

Its military response has killed more than 53,000 people, according to the Hamas-run health ministry in Gaza, which does not differentiate between civilians and combatants.

World

The chilling moment in Russia-Ukraine peace talks – as Putin makes mockery of Trump’s efforts to end war

Published

3 hours ago

May 17, 2025

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The chilling moment in Russia-Ukraine peace talks - as Putin makes mockery of Trump's efforts to end war

Vladimir Putin made a mockery this week of Donald Trump’s efforts to end the war in Ukraine.

Far from punishing him for it, the US president went out of his way to dodge calls to get tough with the Russian leader.

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On Sunday, President Trump called on leaders of both Russia and Ukraine to meet.

He posted: “President Putin of Russia wants to meet on Thursday, in Turkey, to negotiate a possible end to the BLOODBATH. Ukraine should agree to this, IMMEDIATELY.”

That post let the Russian leader off the hook. Only the day before, Putin had been ordered by Ukraine’s allies, including America, to agree to a 30-day unconditional ceasefire.

The Russian president had swerved that demand, suggesting talks instead.

“If the ceasefire is not respected, the US and its partners will impose further sanctions,” Trump posted before swivelling and backing Putin’s proposals for talks instead.

Undeterred, Ukraine’s President Volodymyr Zelenskyy accepted the call.

Putin though refused to go, sending officials instead.

And yet there was no reprimand from the US president. Instead, he chose to undermine the talks he had himself called for.

“Look, nothing is going to happen until Putin and I get together,” he told reporters on Air Force One. So much for that then.

It is what happened in those talks though that should give the US president the greatest pause for thought about Putin’s intentions – as it does in Kyiv.

The message they brought was blunt and belligerent, threatening eternal war.

“We don’t want war, but we’re ready to fight for a year, two, three – however long it takes,” lead Russian negotiator Vladimir Medinsky is reported to have said. “We fought Sweden for 21 years. How long are you ready to fight?”

Far from offering a compromise, they are reported to have demanded the withdrawal of Ukrainian troops from the four regions they have partially seized by force and the capitulation of another two, just for good measure.

And there was a chilling moment when the Russians are reported to have threatened their interlocutors like gangsters.

“Maybe some of those sitting here at this table will lose more of their loved ones,” Mednisky said. Russia is prepared to fight forever.

For Sergiy Kyslytsya, Ukraine’s deputy foreign minister, that was personal.

Max, his 23-year-old nephew, lost his life fighting the Russians in 2022 not long after their illegal and unprovoked invasion began.

At the end of this week, Putin appears scornful of Western efforts to end this war through a ceasefire and negotiations and Trump seems happy to let him get away with it.

Even Fox News, normally slavishly subservient to Trump, is wondering what gives.

Its anchor Bret Baier is no Jeremy Paxman, but in an interview last night asked Donald Trump 10 times if he might finally now put pressure on Putin.

The US president ducked and dived, talking about the money he had made in his Gulf tour, Zelenskyy’s shortcomings, Biden, and Iran instead. But he did not give a straight answer to the question.

With performances like that, Putin has nothing to worry about. Trump’s position though seems increasingly untenable.

Ukraine’s European allies though should be alarmed. They threatened Russia with sanctions and retaliation last weekend if he rejected a ceasefire. He now has.

With or without America, will they be good to their word?