Nadhim Zahawi says tax error was found to be ‘careless and not deliberate’ after calls for his sacking
Nadhim Zahawi says his tax error was found to be “careless and not deliberate” after Labour called for him to be sacked over his finances.
The Tory chairman and cabinet member released a statement saying he wanted to “address some of the confusion” about his finances.
He said his father took founder shares in YouGov and that HMRC later “disagreed about the exact allocation”, leading him to “settle the matter and pay what they said was due”.
“They concluded that this was a ‘careless and not deliberate’ error,” he said.
“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.”
‘I asked my father to help’
Questions have swirled following an article in The Sun on Sunday, which claimed a seven-figure payment was made by Mr Zahawi to end a dispute with the taxman “after scrutiny of his family’s financial affairs”.
Mr Zahawi also said in his statement: “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.”
Mr Zahawi co-founded the polling company before entering politics, with shares kept in Balshore Investments, a Gibraltar-registered family trust.
The firm, which is headquartered in the UK, but has operations in Europe, North America, the Middle East and Asia-Pacific.
What do we know about Nadhim Zahawi’s tax affairs?
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Shadow chancellor Rachel Reeves calls for Nadhim Zahawi to be sacked
A ‘murky affair’
Pressure has been mounting on the 55-year-old politician to respond to questions over his tax affairs, however up to now he had refused to comment.
The Guardian first reported that he paid a 30% penalty, taking the estimated total tax bill to more than £4.8m.
Responding to his statement, Labour Party Chair, Anneliese Dodds MP, said: “This blows a hole in Nadhim Zahawi’s previous accounts of this murky affair. He must now publish all correspondence with HMRC so we can get the full picture.
“In the middle of the biggest cost-of-living crisis in a generation, the public will rightly be astonished that anyone could claim that failing to pay millions of pounds worth of tax is a simple matter of ‘carelessness”.
Calling for his removal as Tory Party Chair, she said Mr Zahawi still had much to explain, including when he became aware of the investigation, and if he was Chancellor at the time.
She also said Prime Minister Rishi Sunak needed to “set the record straight immediately” clarifying exactly what he knew about the investigation into Mr Zahawi.
The PM should ‘do the right thing’
Ahead of his statement, Labour had renewed calls for the prime minister to take action, and sack Mr Zahawi.
Speaking at the Fabian Society conference on Saturday, Labour’s shadow chancellor Rachel Reeves said: “A few months ago… He was chancellor of the exchequer and responsible for Britain’s tax affairs and tax collection, and we now find that he wasn’t so keen to pay himself.
“So, if the prime minister wants to stick by his commitment for integrity, honesty and professionalism, he should do the right thing and sack Nadhim Zahawi.”
Mr Zahawi was chancellor between July and September last year, in the closing days of Boris Johnson’s premiership.
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Deputy Prime Minister Dominic Raab defends his Tory colleague
‘Proper transparency’
However, Deputy Prime Minister Dominic Raab defended Mr Zahawi, telling Sky News: “I can’t speak for the personal tax affairs of a colleague, but what I would say is that Nadhim has been very clear that he’s paid all the tax that he’s owed, that he’s paid it on time, that there’s nothing outstanding due, and I think that’s of course right and proper.
“If there’s further questions, of course, I’m sure there’ll be the proper transparency.”
Asked if Mr Zahawi will still be in his post in a month, Mr Raab said: “A month’s a long time in politics. I certainly hope so.”
A spokesman for Mr Zahawi previously said his taxes were “properly declared and paid in the UK” and the minister had “never had to instruct any lawyers to deal with HMRC on his behalf”.
Rishi Sunak also defended his colleague at Prime Minister’s Questions on Wednesday, saying Mr Zahawi “has already addressed this matter in full and there’s nothing more that I can add”.
The spotlight on Mr Zahawi’s tax affairs has rounded off a challenging week for the PM, who on Friday was fined by police for not wearing a seatbelt in the back of a moving car.
World
Body of missing rabbi Zvi Kogan found in UAE – as Israeli PM says he was murdered in ‘antisemitic terror incident’
The COP29 climate talks have reached a last ditch deal on cash for developing countries, pulling the summit back from the brink of collapse after a group of countries stormed out of a negotiating room earlier.
The slew of deals finally signed off in the small hours of Sunday morning in Azerbaijan includes one that proved hardest of all – one about money.
Eventually the more than 190 countries in Baku agreed a target for richer polluting countries such as the UK, EU and Japan to drum up $300bn a year by 2035 to help poorer nations both curb and adapt to climate change.
It is a far cry from the $1.3trn experts say is needed, and from the $500bn that vulnerable countries like Uganda had said they would be willing to accept.
But in the end they were forced to, knowing they could not afford to live without it, nor wait until next year to try again, when a Donald Trump presidency would make things even harder.
Bolivia’s lead negotiator Diego Pacheco called it an “insult”, while the Marshall Islands’ Tina Stege said it was “not nearly enough, but it’s a start”.
UN climate chief Simon Stiell said: “This new finance goal is an insurance policy for humanity, amid worsening climate impacts hitting every country.
“No country got everything they wanted, and we leave Baku with a mountain of work still to do. So this is no time for victory laps.”
The funding deal was clinched more than 24 hours into overtime, and against what felt like all the odds.
The talks were rocked from the start by the incoming presidency of climate denier Mr Trump, the moment Argentina’s team were recalled back to Buenos Aires by their right-wing president and a controversial letter that sent shockwaves through the United Nations.
Pic: AP
The fraught two weeks of negotiations pitted the anger of developing countries who are footing the bill for more dangerous weather that they did little to cause, against the tight public finances of rich countries.
A relieved Juan Carlos Monterrey Gomez, climate envoy for Panama, said there is “light at the end of the tunnel”.
Just hours ago, the talks almost fell apart as furious vulnerable nations stormed out of negotiations in frustration over that elusive funding goal.
They were also angry with oil and gas producing countries, who stood accused of trying to dilute aspects of the deal on cutting fossil fuels.
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Climate-vulnerable nations storm out of talks
The UN talks work on consensus, meaning everyone has to agree for a deal to fly.
A row over how to follow up on last year’s pledge to “transition away from fossil fuels” was left unresolved and punted into next year, following objections from Chile and Switzerland for being too weak.
A draft deal simply “reaffirmed” the commitment but did not dial up the pressure in the way the UK, EU, island states and many others here wanted.
Saudi Arabia fought the hardest against any step forward on cutting fossil fuels, the primary cause of climate change that is intensifying floods, drought and fires around the world.
Governments did manage to strike a deal on carbon markets at COP29, which has been 10 years in the making and will allow countries to trade emissions cuts.
‘Not everything we wanted’
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The UK’s energy secretary, Ed Miliband, said the deal is “not everything we or others wanted”, but described it as a “step forward”.
“It’s a deal that will drive forward the clean energy transition, which is essential for jobs and growth in Britain and for protecting us all against the worsening climate crisis,” he added.
“Today’s agreement sends the signal that the clean energy transition is unstoppable.
“It is the biggest economic opportunity of the 21st century and through our championing of it we can help crowd in private investment.”
Protesters at the summit in Baku. Pic: AP
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The Azerbaijan team leading COP29 said: “Every hour of the day, we have pulled people together. Every inch of the way, we have pushed for the highest common denominator.
“We have faced geopolitical headwinds and made every effort to be an honest broker for all sides.”
At least 20 people have been killed and 66 injured in Israeli strikes on central Beirut, Lebanese authorities have said.
Lebanon‘s health ministry said the death toll could rise as emergency workers dig through the rubble looking for survivors. DNA tests are being used to identify the victims, the ministry added.
The attack destroyed an eight-storey residential building and badly damaged several others around it in the Basta neighbourhood at 4am (2am UK time) on Saturday.
The central Basta neighbourhood in Beirut
The Israeli military did not warn residents to evacuate before the attack and has not commented on the casualties.
At least four bombs were dropped in the attack – the fourth targeting the city centre this week.
A separate drone strike in the southern port city of Tyre this morning killed two people and injured three, according to the state-run National News Agency.
The victims were Palestinian refugees from the nearby al Rashidieh camp who were out fishing, according to Mohammed Bikai, spokesperson for the Fatah Palestinian faction in the Tyre area.
Israel’s military warned residents today in parts of Beirut’s southern suburbs that they were near Hezbollah facilities, which the army would target in the near future. The warning, posted on X, told people to evacuate at least 500 metres away.
The army said that over the past day it had conducted intelligence-based strikes on Hezbollah targets in Dahiyeh, in Beirut’s southern suburbs, where Hezbollah has a strong presence. It said it hit several command centres and weapons storage facilities.
Pic: AP
Israel has killed several Hezbollah leaders in air strikes on the capital’s southern suburbs.
Heavy fighting between Israel and Hezbollah is ongoing in southern Lebanon, as Israeli forces push deeper into the country since launching a major offensive in September.
According to the Lebanese health ministry, at least 3,670 people have been killed in Israeli attacks there, with more than 15,400 wounded.
It has displaced about 1.2 million people – a quarter of Lebanon’s population – while Israel says about 90 soldiers and nearly 50 civilians have been killed in northern Israel.
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‘Dozens’ of Palestinians killed in Israeli airstrike
Meanwhile, six people, including three children and two women, were killed in the southern Gazan city of Khan Younis.
Some 44,176 Palestinians have been killed since the start of Israel’s military campaign in Gaza, according to the Gaza health ministry.
The ministry does not distinguish between civilians and combatants in its count, but it has said that more than half of the fatalities are women and children.
The war began when Hamas-led militants stormed into southern Israel on 7 October 2023, killing some 1,200 people and taking another 250 hostage.
US envoy Amos Hochstein was in the region this week to try to end more than 13 months of fighting between Israel and Hezbollah, ignited last October by the war in Gaza.
Mr Hochstein indicated progress had been made after meetings in Beirut on Tuesday and Wednesday, before going to meet Israeli Prime Minister Benjamin Netanyahu and defence minister Israel Katz.
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