Labour has called on Rishi Sunak to dismiss Nadhim Zahawi from his cabinet after questions over the Tory chairman’s tax affairs remain unanswered.
Questions have swirled following an article in The Sun on Sunday, which claimed a seven-figure payment was made by Mr Zahawito end a dispute with the taxman “after scrutiny of his family’s financial affairs”.
The paper alleged there were questions over his use of an offshore company – a Gibraltar-registered family trust called Balshore Investments – to hold shares in the polling firm YouGov.
Mr Zahawi has previously denied he was a beneficiary of Balshore Investments.
HMRC is facing pressure to reveal whether Mr Zahawi paid a penalty to the tax office and Labour has written to the government department arguing the “public requires answers” over the matter.
After the Guardian newspaper earlier on Friday reiterated the allegation that Mr Zahawi agreed to pay a penalty to HMRC as part of a seven-figure settlement, Labour’s deputy leader Angela Raynerhas called for him to be “dismissed”.
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“Rishi Sunak promised a government of integrity, professionalism, and accountability but instead he’s propping up a motley crew of scandal-ridden ministers,” she said in a statement.
“Nadhim Zahawi’s story doesn’t add up.
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“The position of the man who was until recently in charge of the UK’s tax system and who this prime minister appointed Conservative Party Chair is now untenable.
“It’s time for Rishi Sunak to put his money where his mouth is and dismiss Nadhim Zahawi from his cabinet.”
Mr Zahawi was seen going into Number 10 Downing Street on Friday and did not respond when asked by Sky News political correspondent Rob Powell if he had been honest about his tax affairs.
‘The public requires answers’
Sky News has made a number of approaches to the Tory MP and his team to clarify the situation around the payment to HMRC, but he has still not revealed if the report is accurate.
Instead, we received a broader comment from the MP’s spokesperson, who said his tax affairs “were and are fully up to date and are paid in the UK”, adding: “He has always said that he will answer any questions from HMRC as he always has done.”
HMRC has said it does not comment on individual cases, but Labour deputy leader Ms Rayner said “given the public interest” in the case “the public requires answers”.
She claimed: “In particular, there appears to be an element of special treatment directed towards Nadhim Zahawi by HMRC.”
Zahawi’s responses to tax dispute claims carefully worded
Questions about Nadhim Zahawi’s financial affairs followed him through his relatively 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.
Nadhim Zahawi has said that neither he nor his wife benefit from this trust.
However, when he founded the polling firm YouGov in May 2000, the trust was allocated shares in the company equalling the number given to Mr Zahawi’s co-founder Stephan Shakespeare.
After digging through pages of documents, the accountant and tax campaigner Dan Neidle has suggested there would have been a tax saving of several million pounds when these shares were sold because they were held by an offshore trust.
It’s this figure the Guardian is suggesting is at the centre of the reported repayment to HMRC.
Nadhim Zahawi’s responses to these stories have always been very specific and carefully worded.
After these latest accusations, a spokesperson for the Tory chairman said he “does not recognise these numbers” and has “never sought legal advice for dealing with HMRC”.
They also insisted Mr Zahawi’s taxes were up to date and fully paid in the UK.
Sources have briefed that Dan Neidle – who is a Labour member – is a “labour activist” and the allegations are merely taken from his “blog”.
One of Mr Zahawi’s more outspoken interventions came during the Number 10 leadership race in July last year though, when he said he was the victim of a “smear” over his financial affairs
That statement puts the cabinet minister in a difficult spot if concrete evidence emerges that he has repaid money to HMRC and potentially even been issued with a penalty.
The timing of any investigation or settlement could be important as well, given Mr Zahawi was briefly chancellor last year.
Ms Rayner called on HMRC to explain the nature of the payment and whether the former chancellor “has admitted fault or incurred financial penalties as part of his settlement”.
A spokesman for Mr Zahawi has said his taxes are “properly declared” and he “has never had to instruct any lawyers to deal with HMRC on his behalf”.
“As we have repeatedly said, Nadhim’s taxes are up to date and are fully paid in the UK. Mr Zahawi does not recognise these numbers and he has never sought legal advice for dealing with HMRC,” the spokesman said.
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Zahawi asked if he settled with HMRC
PM ‘has full confidence’ in Zahawi
Mr Sunak defended his colleague at Prime Minister’s Questions (PMQs) on Wednesday, saying Mr Zahawi “has already addressed this matter in full and there’s nothing more that I can add”.
Downing Street was pressed for more information during a press briefing on Friday.
Asked if any concerns had been raised about Mr Zahawi’s taxes before Mr Sunak made him party chair, the prime minister’s official spokesman said he was not aware of any “specific” conversations.
Before entering politics, Mr Zahawi co-founded YouGov and is thought to have a net worth of around £100m.
The Observer claimed civil servants in the Cabinet Office’s propriety and ethics team alerted the prime minister to an HMRC “flag” over Mr Zahawi before his appointment, but Mr Johnson went ahead “despite the possible concerns over his tax affairs”.
The minister claimed he was “clearly being smeared” in his campaign to become Conservative Party leader, telling Sky News he had “always” paid his taxes and had “declared” them in the UK.
Hezbollah has vowed to continue its resistance to Israel after the ceasefire came into effect.
Brokered by the US and France, the halt to fighting in Lebanon will see both Israeli and Hezbollah forces retreat.
Its announcement was met by cheers on the streets of Lebanon, where people quickly began taking to the roads, streaming back to the war-ravaged south of the country.
Cars and vans piled high with belongings snaked through parts of Lebanon, heading south.
The ceasefire was a rare diplomatic win in a region that has been racked by intensified conflicts over the last 14 months.
It ended the deadliest confrontation between Israel and Hezbollah in years, but didn’t address fighting, or worries over humanitarian issues, in the Gaza Strip.
UN secretary general Antonio Guterres described the truce as “the first ray of hope” in months as leaders across the world welcomed it.
In the southern Lebanese village of Zibqin, Asya Atwi returned to her ruined home with her husband and daughter.
“The important thing is that we’re back, against Israel’s will and against the will of all the enemies,” she said. “We came back to our hometown, and we will sleep on the rubble.”
‘Let’s hope for the best’
The conflict across the Israeli-Lebanon border has claimed more than 3,760 lives – the vast majority Lebanese – and displaced more than one million people.
Israel has said its military aim fighting in Lebanon was to secure the return of 60,000 Israelis who fled communities in the country’s north.
Asor Gal’it, returning to the Israeli border town of Metula, said on Wednesday she heard some shots when she arrived home.
“We were a little afraid, but we trust our army and let’s see what happens. Let’s hope for the best,” she said.
As Israel pulls out of Lebanon, Hezbollah will pull back north of the Litani River which is about 30km (20 miles) from the border and the Lebanese army will deploy to the area.
In the hours leading up to the ceasefire, Israel conducted waves of attacks on Lebanon.
‘Heading towards famine again’
While the ceasefire has brought a cessation of violence in Lebanon, fighting remains ongoing in Gaza where Israel has vowed to destroy Hamas.
President Joe Biden said his administration was also pushing for an elusive ceasefire deal in the enclave which is “heading towards famine again” a charity chief told Sky News.
Deputy executive director of The World Food Programme Carl Saku told The World with Yalda Hakim that he was “extremely worried about the situation in Gaza”.
He said: “We are heading towards famine again.
“In June and July we’d managed to stabilise the situation and there was access to basic food commodities but in the last six to eight weeks there has been a massive deterioration.
“In the north it’s due to the resumption of the fighting and evacuation orders and in the south it is due to a complete breakdown of law and order.”
As residents of southern Lebanon begin returning to neighbourhoods reduced to rubble, new data shared with Sky News illustrates the impact of the conflict.
The Centre for Information Resilience has verified more than 400 videos showing 300 separate incidents of harm to civilians and damage to infrastructure in Lebanon.
It offers a window into the extent of the destruction since fighting began in October last year.
This research is part of a larger set of open-source data showing harm to civilians and damage to infrastructure collected by CIR on and since 7 October last year, covering Gaza, the West Bank and Israel, as well as Lebanon.
As of 25 November, fighting had displaced more than 899,000 people in Lebanon and killed nearly 4,000 people, according to the International Organisation for Migration, the United Nations High Commissioner for Refugees and the Lebanese health ministry.
The number of deaths – mostly recorded since September, when Israel ramped up attacks against Hezbollah members in Beirut – does not distinguish between civilians and Hezbollah fighters.
Across Lebanon, the cost of physical damages and economic loss due to the conflict is estimated at $8.5bn, according to a World Bank report published on 14 November. Almost 100,000 housing units have been damaged or fully destroyed.
Across the border in northern Israel, more than 60,000 people have been evacuated from their homes, and 80 soldiers and 50 civilians have been killed in Hezbollah attacks, according to Israeli officials.
The Institute for the Study of War has recorded attacks by Hezbollah and Israel between 7 October 2023 and 26 November, the day before the ceasefire.
Since the ceasefire was announced, thousands of those displaced have started streaming back to deserted neighbourhoods in southern Lebanon.
The Israeli military warned displaced Lebanese against moving south towards previously evacuated villages.
“We inform you that starting from 5pm until tomorrow morning at 7am it is absolutely forbidden to travel south of the Litani river,” said Avichay Adraee, the IDF’s Arabic spokesperson.
“Whoever is north of the Litani river is prohibited from moving south. Whoever is south of the Litani river must remain where he is,” the statement added.
The warning was published on X just minutes before the curfew was due to come into force.
Some residents had already made the journey.
In footage verified by Sky News, a resident returned to Kfarchouba, right on the border with Israel, which appears to have been reduced to rubble.
Further south, in Bint Jbeil, people returning home filmed from their car windows, showing destroyed buildings and empty streets. In most cases, residents are not coming back to the same places they left.
The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.
Three American citizens who had been detained in China for years have been released, Sky’s US partner network NBC News reports.
Kai Li, Mark Swidan and John Leung will return to the US, reportedly after an agreement was reached as part of sensitive negotiations.
It comes after Politico cited an unnamed US official claiming years-long attempts to free the trio have succeeded, in exchange for unidentified Chinese citizens in US custody.
“We are pleased to announce the release of Mark Swidan, Kai Li, and John Leung from detention in the People’s Republic of China,” a State Department spokesperson said.
“Soon they will return and be reunited with their families for the first time in many years.
“Thanks to this administration’s efforts and diplomacy with the PRC [People’s Republic of China], all of the wrongfully detained Americans in the PRC are home.”
Senate majority leader Chuck Schumer said he’s worked closely with Mr Li’s son, Harrison Li, who has previously said “I have now spent a third of my life missing my dad”.
“Even when it felt like there was no hope, we never stopped believing that one day Mr Li would return home,” Mr Schumer said in a statement on Wednesday.
For the families of all three freed Americans, “this Thanksgiving there is so much to be thankful for”, he added.
It comes after the surprise release of US pastor David Lin in September, after he had been in jail in China since 2006.
What were the trio accused of?
Mr Li, 70, was detained in 2016 and sentenced to 10 years imprisonment in 2018 on espionage charges his family described as baseless.
Texas businessman Mr Swidan, in his 40s, had been held since 2012 and sentenced to death with a reprieve in 2019 on drug-related charges a UN group said has no basis.
Mr Leung, an American in his 70s who also has permanent residency in the Chinese territory of Hong Kong, was arrested in 2021 and sentenced to life in prison last year.
He had been found guilty of espionage by a court in eastern China.
In September, Mr Swidan’s mother, Katherine Swidan, and Harrison Li were among the relatives who appeared before the congressional executive commission on China to press the US government to do more.
“Every day, I wake up and shudder at the thought of him crammed into a tiny cell with as many as 11 other people,” Harrison said at the hearing.
He added in the last eight years his father had suffered a stroke, lost a tooth and spent more than three years “essentially locked in his cell 24/7” due to China’s “zero-Covid” restrictions.
He was also concerned efforts to release his father and others could be slowed by the change of administration in January.
Chinese citizens identified
Two men sent back to China were identified as Xu Yanjun, an officer for China’s Ministry of State Security (MSS), and Ji Chaoqun, a Chinese national, CNBC’s Eamon Javers said, quoting a US government official.
Xu Yanjun was arrested for trying to steal technology from GE Aviation, according to a CNBC documentary aired last year.
Dozens more held
The Dui Hua Foundation, which monitors prisoner rights in China, estimates there are about 200 American detainees, more than in any other foreign country.
This figure includes Americans imprisoned as well as those who are prevented from leaving the country while a case is under investigation.
The US classifies only a handful of them as wrongfully detained.
Other families are still waiting for the return of relatives detained in China, including Nelson Wells Jr and Dawn Hunt.
Many others have not made their cases public out of fear it could obstruct their return.