Nadhim Zahawi sacked: What Sir Laurie Magnus found in his tax row probe

Published

2 years ago

January 29, 2023

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Nadhim Zahawi’s failure to disclose that he was in discussions with HMRC over his taxes was a “serious failure to meet” ministerial standards, a damning report into the affair has found.

Sir Laurie Magnus, who carried out the investigation as the prime minister’s new ethics adviser, said the former chancellor “should have understood” from the outset that he was under investigation by HMRC and that it was a “serious matter”.

He also criticised the MP for Stratford-on-Avon for failing to correct the record for more than six months, after he dismissed reports that HMRC was “looking into” his tax affairs as “smears” during a July 2022 interview with Sky News’s Kay Burley.

Mr Zahawi was sacked as Tory party chairman on Sunday by Prime Minister Rishi Sunak following the publication of Sir Laurie’s report, which looked into whether the former minister had fallen foul of the ministerial code.

Here Sky News looks at the key points in Sir Laurie’s report:

‘Mr Zahawi should have understood this was a serious matter’

“Mr Zahawi has told me that he had formed the impression that he and his advisers were merely being asked certain queries by HMRC concerning his tax affairs, and that this impression persisted until he received a letter from HMRC on 15 July 2022.

“On the basis of the confidential information to which I have had access, including correspondence between HMRC and Mr Zahawi personally, I consider that an individual subject to the HMRC process faced by Mr Zahawi should have understood at the outset that they were under investigation by HMRC and that this was a serious matter.”

‘Investigation was a relevant matter for a minister to declare’

“I consider that an HMRC investigation of the nature faced by Mr Zahawi would be a relevant matter for a Minister to discuss and declare as part of their declaration of interests.

“I would expect a Minister to inform their Permanent Secretary and to seek their advice on any implications for the management of their responsibilities.

Politics news – latest: Zahawi attacks media after sacking

“I would likewise expect a Minister proactively to update their declaration of interests form to include details of such an HMRC process.”

‘Mr Zahawi’s failure to declare investigation did not meet ministerial standards’

“After his appointment as Chancellor on 5 July 2022, Mr Zahawi completed a declaration of interests form which contained no reference to the HMRC investigation.

“A later form acknowledged (by way of an attachment) that Mr Zahawi was in discussion with HMRC to clarify a number of queries.

“Only following receipt of HMRC’s letter received on 15 July 2022, did Mr Zahawi update his declaration of interests form to acknowledge that his tax affairs were under investigation, but he provided no further details other than the statement made previously that he was clarifying queries.

“Given the nature of the investigation by HMRC, which started prior to his appointment as Secretary of State for Education on 15 September 2021, I consider that by failing to declare HMRC’s ongoing investigation before July 2022 – despite the ministerial declaration of interests form including specific prompts on tax affairs and HMRC investigations and disputes – Mr Zahawi failed to meet the requirement to declare any interests which might be thought to give rise to a conflict.”

‘Mr Zahawi failed to declare HMRC investigation ended in penalty’

“The subsequent fact that the investigation concluded with a penalty in relation to the tax affairs of a Minister also requires declaration and discussion.

“It is a relevant interest which could give rise to a conflict, and particularly so in the case of HM Treasury Ministers and the Chancellor of the Exchequer, who has responsibility for the UK tax system.

“As a result of my inquiries, I conclude that Mr Zahawi failed to update his declaration of interest form appropriately after this settlement was agreed in principle in August 2022.

“It was not until mid-January 2023 that details of the earlier HMRC investigation and its outcome were declared.”

‘Omissions constitute a serious failure to meet ministerial standards’

“I also conclude that, in the appointments process for the governments formed in September 2022 and October 2022, Mr Zahawi failed to disclose relevant information – in this case the nature of the investigation and its outcome in a penalty – at the time of his appointment, including to Cabinet Office officials who support that process.

“Without knowledge of that information, the Cabinet Office was not in a position to inform the appointing Prime Minister.

“Taken together, I consider that these omissions constitute a serious failure to meet the standards set out in the Ministerial Code.”

Nadhim Zahawi’s interview with Sky News in July 2022

What Mr Zahawi said:

“There have been news stories over the last few days which are inaccurate, unfair and are clearly smears. It’s very sad that such smears should be circulated and sadder still that they have been published.

“These smears have falsely claimed that the Serious Fraud Office, the National Crime Agency, and HMRC are looking into me. Let me be absolutely clear. I am not aware of this. I have not been told that this is the case.

“I’ve always declared my financial interests and paid my taxes in the UK. If there are questions, of course, I will answer any questions HMRC has of me.”

What Sir Laurie said about the statement:

“Mr Zahawi has told me that at the time of this statement, he was under the impression that he was answering HMRC’s queries, but that he was not under investigation.

“I consider that an individual subject to the HMRC process faced by Mr Zahawi should have understood that they were under investigation by HMRC and that this was a serious matter.

“Under the Ministerial Code, Ministers have a duty to ‘be as open as possible with Parliament and the public’.

“Whilst this duty clearly does not extend to disclosing personal tax information, it does include a general duty to be accurate in statements to ensure a false impression is not given or maintained.

“Mr Zahawi did not correct the record until 21 January 2023, when Mr Zahawi’s public statement indicated that he had reached a settlement with HMRC following an investigation.

“I consider that this delay in correcting an untrue public statement is inconsistent with the requirement for openness.”

‘Insufficient regard for Ministerial Code’

“I consider that Mr Zahawi, in holding the high privilege of being a Minister of the Crown, has shown insufficient regard for the General Principles of the Ministerial Code and the requirements in particular, under the seven Principles of Public Life, to be honest, open and an exemplary leader through his own behaviour.

“I want to commend Mr Zahawi for his willingness to assist with my inquiry. I also fully appreciate the pressures faced by Ministers as they address the complex issues of government and the difficulties they encounter in balancing the demands of their personal lives and their ministerial responsibilities.

“These factors, however, cannot mitigate my overall judgement that Mr Zahawi’s conduct as a Minister has fallen below the high standards that, as Prime Minister, you rightly expect from those who serve in your government.”

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Two security workers injured after grenades thrown at aid site, Gaza Humanitarian Foundation says

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2 hours ago

July 5, 2025

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Two security workers injured after grenades thrown at aid site, Gaza Humanitarian Foundation says

Two American security workers in Gaza were injured after grenades were thrown during food distribution in Khan Younis, the Gaza Humanitarian Foundation (GHF) has said.

In a statement, the US and Israeli-backed aid group said a targeted terrorist attack was carried out at one of its sites in southern Gaza on Saturday morning.

The two Americans injured “are receiving medical treatment and are in stable condition,” it said, adding that the delivery of aid was “otherwise successful” and that “no local aid workers or civilians were harmed”.

GHF didn’t say exactly when the incident happened but claimed Hamas was behind the attack, adding: “GHF has repeatedly warned of credible threats from Hamas, including explicit plans to target American personnel, Palestinian aid workers, and the civilians who rely on our sites for food.

“Today’s attack tragically affirms those warnings.”

Later, the aid group posted a picture on social media, which it said showed “fragments of a grenade packed with ball bearings” that was used in the attack.

Asked by Sky’s US partner network, NBC News, whether the two injured individuals were responsible for handing out aid or were responsible for providing security, GHF said they were “American security workers” and “two American veterans.”

The aid group did not provide specific evidence that Hamas was behind the attack.

The US and Israeli-backed group has been primarily responsible for aid distribution since Israel lifted its 11-week blockade of the Gaza Strip in May.

It comes after Sky News analysis showed GHF aid distributions are associated with a significant increase in deaths in Gaza.

According to Gaza’s health ministry, 600 Palestinians have been killed while seeking aid from GHF sites as of 3 July, which charities and the UN have branded “death traps”.

Meanwhile, the Associated Press has reported that Israeli-backed American contractors guarding GHF aid centres in Gaza are using live ammunition and stun grenades.

GHF has vehemently denied the accusations, adding that it investigated AP’s allegations and found them to be “categorically false”.

Israel’s military added that it fires only warning shots and is investigating reports of civilian harm.

It denies deliberately shooting at any innocent civilians and says it’s examining how to reduce “friction with the population” in the areas surrounding the distribution centres.

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Hamas gives ‘positive’ response to ceasefire proposal but asks for amendments

Published

8 hours ago

July 5, 2025

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Hamas gives 'positive' response to ceasefire proposal but asks for amendments

Hamas has said it has “submitted its positive response” to the latest proposal for a ceasefire in Gaza to mediators.

The proposal for a 60-day ceasefire was presented by US President Donald Trump, who has been pushing hard for a deal to end the fighting in Gaza, with Israeli Prime Minister Benjamin Netanyahu set to visit the White House next week to discuss a deal.

Mr Trump said Israel had agreed to his proposed ceasefire terms, and he urged Hamas to accept the deal as well.

Hamas’ “positive” response to the proposal had slightly different wording on three issues around humanitarian aid, the status of the Israeli Defence Forces inside Gaza and the language around guarantees beyond the 60-day ceasefire, a source with knowledge of the negotiations revealed.

But the source told Sky News: “Things are looking good.”

Hamas said it is “fully prepared to immediately enter into a round of negotiations regarding the mechanism for implementing this framework” without elaborating on what needed to be worked out in the proposal’s implementation.

The US said during the ceasefire it would “work with all parties to end the war”.

A Hamas official said on condition of anonymity that the truce could start as early as next week.

But he added that talks were needed first to establish how many Palestinian prisoners would be released in return for each freed Israeli hostage and to specify the amount of humanitarian aid that will be allowed to enter Gaza during the ceasefire.

He said negotiations on a permanent ceasefire and the full withdrawal of Israeli troops from Gaza in return for the release of the remaining hostages would start on the first day of the truce.

Hamas has been seeking guarantees that the 60-day ceasefire would lead to a total end to the nearly 21-month-old war, which caused previous rounds of negotiations to fail as Mr Netanyahu has insisted that Israel would continue fighting in Gaza to ensure the destruction of Hamas.

The Hamas official said that Mr Trump has guaranteed that the ceasefire will extend beyond 60 days if necessary to reach a peace deal, but there is no confirmation from the US of such a guarantee.

Speaking to journalists on Air Force One, Mr Trump welcomed Hamas’s “positive spirit” to the proposal, adding that there could be a ceasefire deal by next week.

Hamas also said it wants more aid to flow through the United Nations and other humanitarian agencies, which comes as the UN human rights officer said it recorded 613 Palestinians killed in Gaza within a month while trying to obtain aid.

Most of them were said to have been killed while trying to reach food distribution points by the controversial US- and Israeli-backed Gaza Humanitarian Foundation (GHF).

The spokeswoman for the UN human rights office, Ravina Shamdasani, said the agency was not able to attribute responsibility for the killings, but added that “it is clear that the Israeli military has shelled and shot at Palestinians trying to reach the distribution points” operated by GHF.

Ms Shamdasani said that of the total tallied, 509 killings were “GHF-related”, meaning at or near its distribution sites.

The GHF accused the UN of taking its casualty figures “directly from the Hamas-controlled Gaza health ministry” and of trying “to falsely smear our effort”, which echoed statements to Sky News by the executive director of GHF, Johnnie Moore.

Mr Moore called the UN figures a “disinformation campaign” that is “meant to shut down our efforts” in the Gaza Strip.

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Gaza: The man in the room acting as backchannel for Hamas in negotiations with US

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8 hours ago

July 5, 2025

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Gaza: The man in the room acting as backchannel for Hamas in negotiations with US

Behind the efforts to secure the Gaza ceasefire and hostage release is the remarkable story of one man’s unlikely involvement.

His name is Bishara Bahbah, he’s a Harvard-educated economics professor from Phoenix, Arizona.

In April, his phone rang. It was Hamas.

Since that phone call, Dr Bahbah has been living temporarily in Qatar where he is in direct contact with officials from Hamas. He has emerged as an important back-channel American negotiator. But how?

An inauguration party

I first met Dr Bahbah in January. It was the eve of President Trump’s inauguration and a group of Arab-Americans had thrown a party at a swanky restaurant in Washington DC’s Wharf district.

There was a sense of excitement. Arab-Americans were crediting themselves for having helped Trump over the line in the key swing state of Michigan.

Despite traditionally being aligned with the Democrats, Arab-Americans had abandoned Joe Biden in large numbers because of his handling of the Gaza war.

I’d reported from Michigan weeks earlier and been struck by the overwhelming support for Trump. The vibe essentially was ‘it can’t get any worse – we may as well give Trump a shot’.

Mingling among diplomats from Middle Eastern countries, wealthy business owners and even the president of FIFA, I was introduced to an unassuming man in his late 60s.

We got talking and shared stories of his birthplace and my adopted home for a few years – Jerusalem.

He told me that he still has the deed to his family’s 68 dunum (16 acre) Palestinian orchard.

With nostalgia, he explained how he still had his family’s UN food card which shows their allocated monthly rations from their time living in a refugee camp and in the Jerusalem’s old city.

Dr Bahnah left Jerusalem in 1976. He is now a US citizen but told me Jerusalem would always be home.

He echoed the views I had heard in Michigan, where he had spent many months campaigning as the president of Arab-Americans for Trump.

He dismissed my scepticism that Trump would be any better than Biden for the Palestinians.

We exchanged numbers and agreed to meet for lunch a few weeks later.

A connection with Trump

Dr Bahbah invited two Arab-American friends to our lunch. Over burgers and coke, a block from the White House, we discussed their hopes for Gaza under Trump.

The three men repeated what I had heard on the campaign trail – that things couldn’t get any worse for the Palestinians than they were under Biden.

Trump, they said, would use his pragmatism and transactional nature to create opportunities.

Dr Bahbah displayed to me his own initiative too. He revealed that he got a message to the Palestinian Authority President, Mahmoud Abbas, to suggest he ought to write a personal letter of congratulations to President Trump.

A letter from Ramallah was on the Oval Office desk on 6 November, a day after the election. It’s the sort of gesture Trump notices.

It was clear to me that the campaigning efforts and continued support of these three wealthy men had been recognised by the Trump administration.

They had become close to key figures in Trump’s team – connections that would, in time, pay off.

There were tensions along the way. When Trump announced he would “own Gaza”, Dr Bahbah was disillusioned.

And then came the AI video of Trump and Israeli Prime Minister Benjamin Netanyahu sunning themselves in a Gazan wonderland.

“It is provocative and unacceptable,” he told me just after the president posted the video in February.

Trump must have thought it was funny, so he posted it. He loves anything with his name on it.”

Then came the Trump plan to resettle Palestinians out of Gaza. To this, he released a public statement titled Urgent Press Release.

“Arab-Americans for Trump firmly rejects President Donald J Trump’s suggestion to remove – voluntarily or forcibly – Palestinians in Gaza to Egypt and Jordan,” he said.

He then changed the name of his alliance, dropping Trump. It became Arab-Americans for Peace.

I wondered if the wheels were coming off this unlikely alliance.

Was he realising Trump couldn’t or wouldn’t solve the Palestinian issue? But Dr Bahbah maintained faith in the new president.

“I am worried, but at the same time, Trump might be testing the waters to determine what is acceptable…,” he told me in late February as the war dragged on.

“There is no alternative to the two-state solution.”

He told me that he expected the president and his team to work on the rebuilding of Gaza and work to launch a process that would culminate in the establishment of a Palestinian state, side by side in peace with Israel.

It was, and remains, an expectation at odds with the Trump administration’s official policy.

The phone call

In late April, Dr Bahbah’s phone rang. The man at the other end of the line was Dr Ghazi Hamad, a senior member of Hamas.

Dr Bahbah and Dr Hamad had never met – they did not know each other.

But Hamas had identified Dr Bahbah as the Palestinian-American with the most influence in Trump’s administration.

Dr Hamad suggested that they could work together – to secure the release of all the hostages in return for a permanent ceasefire.

Hamas was already using the Qatari government as a conduit to the Americans but Dr Bahbah represented a second channel through which they hoped they could convince President Trump to increase pressure on Israel.

There is a thread of history which runs through this story. It was the widow of former Palestinian leader Yasser Arafat who passed Dr Bahbah’s number to Dr Hamad.

In the 1990s, Dr Bahbah was part of a Palestinian delegation to the multilateral peace talks.

He became close to Arafat but he had no experience of a negotiation as delicate and intractable as this.

The first step was to build trust. Dr Bahbah contacted Steve Witkoff, Trump’s Middle East envoy.

Witkoff and Bahbah had something in common – one a real-estate mogul, the other an academic, neither had any experience in diplomacy. It represented the perfect manifestation of Trump’s ‘outside the box’ methods.

But Witkoff was sceptical of Dr Bahbah’s proposal at first. Could he really have any success at securing agreement between Israel and Hamas? A gesture to build trust was necessary.

Bahbah claims he told his new Hamas contact that they needed to prove to the Trump administration that they were serious about negotiating.

Within weeks a remarkable moment more than convinced Dr Bahbah and Witkoff that this new Hamas back-channel could be vitally important.

On 12 May, after 584 days in Hamas captivity, Israeli-American Edan Alexander was released.

We were told at the time that his release was a result of a direct deal between Hamas and the US.

Israel was not involved and the deal was described by Hamas as a “good faith” gesture. Dr Bahbah sees it as his deal.

Direct talks took place between Dr Bahbah and five Hamas officials in Doha who would then convey messages back to at least 17 other Hamas leadership figures in both Gaza and Cairo.

Dr Bahbah in turn conveyed Hamas messages back to Witkoff who was not directly involved in the Hamas talks.

A Qatari source told me that Dr Bahbah was “very involved” in the negotiations.

But publicly, the White House has sought to downplay his role, with an official telling Axios in May that “he was involved but tangentially”.

The Israeli government was unaware of his involvement until their own spies discovered the backchannel discussion about the release of Alexander.

Since that April phone call, Dr Bahbah has remained in the Qatari capital, with trips to Cairo, trying to help secure a final agreement.

He is taking no payment from anyone for his work.

As he told me when we first met back in January: “If I can do something to help to end this war and secure a future for the Palestinian people, I will.”