What do we know about Conservative Party chairman Nadhim Zahawi’s tax affairs?
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”.
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Speaking in July, 2022, the then Tory leadership contender told Kay Burley he was ‘clearly being smeared’ over tax claims
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.
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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.
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Zahawi asked if he settled with HMRC
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.
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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”.
Read more: Nadhim Zahawi says HMRC concluded tax error was ‘careless and not deliberate’
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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.
Donald Trump’s Middle East envoy has met Israel’s prime minister in an effort to secure a ceasefire deal in Gaza before the president-elect takes office on 20 January.
Benjamin Netanyahu’s office confirmed details of the meeting with Steve Witkoff on Saturday, adding that the head of the Israeli Mossad intelligence agency has been deployed to Qatar in order to “advance” talks.
It was not immediately clear when David Barnea would travel to Doha for the latest round of indirect discussions between Israel and Hamas.
Earlier on Saturday, an Israeli official said some progress had been made, mediated by Egypt, Qatar and the United States, to reach a deal in Gaza.
Ronen Bar (left), director of Israel’s security agency, and David Barnea (right), head of Mossad, at a ceremony marking the 7 October Hamas attack. File pic: Reuters
The mediators are making renewed efforts to halt fighting in Gaza and free the remaining Israeli hostages held there before Mr Trump takes office.
A deal would also involve the release of some Palestinian prisoners held in Israeli jails.
Families of Israeli hostages welcomed Mr Netanyahu’s decision to dispatch the officials, with the Hostages and Missing Families Forum Headquarters describing it as a “historic opportunity”.
Mr Witkoff arrived in Doha on Friday and met the Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani, Qatar’s foreign ministry said.
Egyptian and Qatari mediators received reassurances from Mr Witkoff that the US would continue to work towards a fair deal to end the war soon, Egyptian security sources said, though no further details were released.
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Israel launched its assault on Gaza after Hamas fighters stormed across its borders in October 2023, killing 1,200 people and taking more than 250 hostages, according to Israeli figures.
Families of the roughly 100 hostages still held in Gaza are pressing Mr Netanyahu to reach a deal to bring their loved ones home.
Since then, more than 46,000 people have been killed in Gaza, according to Palestinian health officials, with much of the area destroyed and gripped by a humanitarian crisis, with most of its population displaced.
Pope Francis has been honoured with America’s highest civilian award by President Joe Biden, who has described the pontiff as “a light of faith, hope, and love that shines brightly across the world”.
It is the first time Mr Biden, 82, has given the Presidential Medal of Freedom with Distinction during his four years in office.
In a statement, the White House said the award is “presented to individuals who have made exemplary contributions to the prosperity, values, or security of the United States, world peace, or other significant societal, public or private endeavours”.
Mr Biden had been scheduled to present the medal to Pope Francis, 88, in person on Saturday in Rome on what was to be the final overseas trip of his presidency. But the president cancelled his visit to monitor the California wildfires.
The White House said Mr Biden bestowed the award during a phone call in which they also discussed efforts to promote peace and alleviate suffering around the world.
President Joe Biden presented Bono with the Presidential Medal of Freedom. Pic: AP
Denzel Washington was also recognised. Pic: AP
Michael J Fox was bestowed with the honour. Pic: AP
The award can be presented with or without distinction.
Mr Biden presented the medal of freedom – without distinction – on 5 January to several people including fellow Democrat Hillary Clinton, humanitarian and U2 singer Bono, fashion designer Ralph Lauren and actors Michael J Fox and Denzel Washington.
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Mr Biden himself is a recipient of the award with distinction, recognised when he was vice president by then president Barack Obama in a surprise ceremony eight years ago.
Barack Obama presented Joe Biden with the Presidential Medal of Freedom with Distinction in 2017. File pic: AP
The citation for the pope’s honour said his “mission of serving the poor has never ceased”.
“A loving pastor, he joyfully answers children’s questions about God. A challenging teacher, he commands us to fight for peace and protect the planet. A welcoming leader, he reaches out to different faiths,” it added.
Ukraine has captured two North Korean soldiers fighting in Russia’s Kursk region, President Volodymyr Zelenskyy has said.
The injured pair are now in Kyiv and communicating with the Security Service of Ukraine, the country’s domestic intelligence agency, he said.
Ukrainian special forces and paratroopers captured the North Koreans, Mr Zelenskyy said in a post on X.
“As with all prisoners of war, these two North Korean soldiers are receiving the necessary medical assistance,” he said.
“I have instructed the Security Service of Ukraine to grant journalists access to these prisoners.
“The world needs to know the truth about what is happening.”
Mr Zelenskyy said capturing the soldiers alive was “not easy”. He also claimed Russian and North Korean forces fighting in Kursk have tried to conceal the presence of North Korean soldiers, including by killing wounded comrades on the battlefield to avoid their capture and interrogation by Ukraine.
The post included images of the two men – one with a bandage around his jaw and the other around both hands and wrists – and what appeared to be a Russian military document.
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Ukraine’s security service SBU on Saturday provided further details.
It said one of those detained had no documents at all, while the other had been carrying a Russian military ID card in the name of a man from Tuva, a Russian region bordering Mongolia.
“The prisoners do not speak Ukrainian, English or Russian, so communication with them takes place through Korean translators in cooperation with South Korean intelligence,” a statement said.
One of the soldiers claimed he had been told he was going to Russia for training, rather than to fight against Ukraine, according to the SBU.
The agency added both men are being provided with medical care in line with the Geneva Conventions, and investigated “in cooperation with South Korean intelligence”.
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North Korean regular troops entered the war on Russia’s side in October, according to Ukraine and its Western allies.
US, South Korean and Ukrainian intelligence assessments suggest up to 12,000 North Korean combat troops have been sent by Pyongyang under a pact with Moscow.
They believe North Korea has also been supplying Russia with vast quantities of artillery shells.
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