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

Published

3 years ago

January 25, 2023

admin

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.

Click to subscribe to the Sky News Daily wherever you get your podcasts

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

‘I don’t regret anything,’ smiling ISIS militant on death row tells Sky News

Published

1 hour ago

August 21, 2025

admin

'I don't regret anything,' smiling ISIS militant on death row tells Sky News

Blindfolded and under armed guard, a captured ISIS fighter is brought before us.

When the blindfold is removed, he doesn’t look surprised to see a camera crew and several counterterrorism officers, one of whom interrogated him when he was first caught.

The 24-year-old militant is on death row in Somalia awaiting execution by firing squad, having been accused of being an ISIS commander, as well as a sniper and a member of a two-man bomb squad.

We’ve been given extremely rare access to speak to him and another ISIS recruit in a secure location in Puntland, the semi-autonomous region of northern Somalia where the terror group has been seizing territory and ruling over terrified communities.

US and Somali commanders say ISIS is running its global headquarters in Puntland’s caves, financing its activities worldwide.

Muthar Hamid Qaayid is from Yemen and came to Somalia via a sea route where we’ve witnessed how challenging it is to halt the flow of militant travellers.

He insists he wasn’t an active participant in the two-man bomb squad – and seems entirely unbothered about the situation he now finds himself in.

“I didn’t press the button,” he says. “I just looked. The other man made the bomb and set it off. I didn’t come here to kill Muslims.”

His partner blew himself up as he was planting the bomb in Bosaso city centre and realised he had been discovered.

Officers believe he detonated it prematurely.

The man in front of us was injured, and we are told he had incriminating bomb-making equipment with him.

I ask him if he has regrets about his involvement and joining the militant group.

“I don’t regret anything,” he says, smiling. “Even if you take me out of the room now and execute me, I don’t regret anything.” Again, another smile.

“If they shoot me or hang me, I don’t mind. In the end, I don’t care.”

Tellingly, he says his family does not like ISIS. “If they found me here, they’d be upset,” he says.

Despite persistent questions, he doesn’t shift much. “I’m not thinking,” he insists. “There’s nothing. I’m just waiting for death.”

I ask if he’d heard of people being killed by the bombs he’s accused of planting.

“Yes, but they don’t kill all people,” he insists.

But what about killing anyone, I suggest, slightly puzzled.

“They don’t kill everyone,” he continues. There’s a pause. “Only infidels”.

Infidels is a term many recruits use to describe those who simply don’t agree with their strict interpretation of Sharia – that can include Muslims as well as other religions.

Officials show us multiple foreign passports recovered from ISIS cave hideouts in Puntland and from those they’ve captured or killed.

There are passports for whole families from South Africa, including children, as well as ones from Germany, Saudi Arabia, Venezuela, and Bahrain.

There are also handfuls of IDs which show European faces.

Since a Puntland army offensive was launched last December, just five of the 600 ISIS fighters killed have been Somalis, says Mohamed Abdirahman Dhabancad, Puntland’s political affairs representative.

‘The main target was to rule the world’

The second prisoner brought before us is from Morocco and is much more talkative.

Usman Bukukar Bin Fuad insists he was duped by ISIS and says he only travelled to Somalia because he’d heard he could make money.

“Instead, I ended up digging caves,” he says. “It was difficult to escape but when they told me to put on a suicide vest to kill Puntland forces, I said this is not what you told me I would be doing – and I escaped.”

He says he was given a weapon but never used it – a claim not believed by his captors.

“I never joined any fight,” he insists. “I had my weapon [AK47] but I just did normal duties taking supplies from location to location and following orders.”

He says he met the ISIS leader in Somalia, Abdul Qadir Mumin, several times.

“He used to visit all the ISIS camps and encourage them to fight.”

“And he’d reassure us all about going to heaven,” he adds.

It seems to lend credence to the belief that Mumin is still alive and operating – up until a few months ago anyway.

He says he was given training in sniping (which he didn’t finish) and map reading, which was interrupted when the Puntland military offensive began.

He says he travelled over from Ethiopia with six Moroccans, before meeting an Algerian recruit.

Fellow militants in the ISIS mountain stronghold were from countries including Tunisia, Libya, Tanzania, Kenya, Turkey, Argentina, Bangladesh, Sweden, and Iraq.

“The main target or focus was to rule the world,” he says. “Starting with this region as one of the gates to the world, then Ethiopia and the rest of the world.

“I heard so much talk about sending ISIS fighters to Bosaso, Ethiopia or Yemen. Sending people to other parts of the world and ruling the world was all part of the plan.”

The captives’ information has added to the belief that Puntland and Somalia is just the tip of a huge ISIS problem which is spreading and is able to cause terror in a range of ways.

Alex Crawford reports from Somalia with specialist producer Chris Cunningham and Richie Mockler. Photography by Chris Cunningham

World

Israel begins first stages of Gaza City takeover operation – as UK condemns settlement plan

Published

1 hour ago

August 21, 2025

admin

Israel begins first stages of Gaza City takeover operation - as UK condemns settlement plan

Israel has said it has begun the first stages of its takeover of Gaza City – as the UK condemned the approval of plans for a new West Bank settlement.

Brigadier General Effie Defrin, Israel’s military spokesperson, said on Wednesday that “IDF forces are holding the outskirts of Gaza City” after preliminary operations to take the entire area.

An estimated 60,000 reserve soldiers have also been called up to help seize Gaza’s biggest urban centre, but will not report for duty until September, according to a military official.

Israeli troops are already operating in the Zeitoun neighbourhood of Gaza City, and the Jabaliya refugee camp in northern Gaza.

Prime Minister Benjamin Netanyahu’s war cabinet approved the plans last month, which include an eventual full security takeover of all of Gaza, despite growing international criticism that it will likely lead to the displacement of many more Palestinians.

He is said to have sped up the timeline for taking control of Hamas strongholds after both sides clashed near Khan Younis, south of Gaza City, on Wednesday.

Israel claims it will help any civilians evacuate before any assault begins.

Ceasefire proposal being considered

Israeli officials said they are also considering a new ceasefire proposal put forward by Qatar and Egypt.

The deal, which involves a 60-day ceasefire and the release of some of the remaining Israeli hostages and Palestinian prisoners, has already been accepted by Hamas.

Thousands of Israeli civilians have called for the government to accept a ceasefire and reverse its decision to take over Gaza City, but Mr Netanyahu is thought to be under pressure from some far-right members of his coalition to reject the deal and continue to pursue the annexation of the territory.

West Bank settlement plan approved

One of those is Bezalel Smotrich, Israel’s finance minister, who announced on Wednesday that a controversial plan for a settlement project in the occupied West Bank had been approved after they received the final go-ahead from Israel’s higher planning committee.

Mr Smotrich, an ultranationalist in the ruling right-wing coalition, said in a statement that the government was delivering with the settlement what it had promised for years: “The Palestinian state is being erased from the table, not with slogans but with actions.”

He said last week that the settlement would “finally bury the idea of a Palestinian state, because there is nothing to recognise and no one to recognise”.

‘A stake through the heart of two-state solution’

British Foreign Secretary David Lammy condemned the plan, saying it “would divide a Palestinian state in two”.

In a post on the X social media platform, Mr Lammy called the settlement in the West Bank “a flagrant breach of international law”, which “critically undermines the two-state solution”, and urged the Israeli government to reverse the decision.

The UN also condemned the decision, with spokesperson Stephane Dujarric saying that it “will drive a stake through the heart of the two-state solution”.

Where is the settlement?

The settlement is set to be built in E1, an open tract of land east of Jerusalem, and includes around 3,500 apartments to expand the existing settlement of Maale Adumim.

E1 has been eyed for Israeli development for more than two decades, but plans were halted due to pressure from the US during previous administrations.

A two-state solution to the decades-old Israeli-Palestinian conflict would see a Palestinian state in East Jerusalem, the West Bank and Gaza existing side by side with Israel.

Today, an estimated 700,000 Israeli settlers live in the West Bank and East Jerusalem. There is also a growing movement of Israelis wanting to build settlements in Gaza.

Settlers make up around 5% of Israel’s population and 15% of the West Bank’s population, according to data from Peace Now.

Settlements are illegal under international law and have been condemned by the UN. They are, however, authorised by the Israeli government.

World

New Zealand: Family’s plea to fugitive dad on the run with children for nearly four years

Published

1 hour ago

August 21, 2025

admin

New Zealand: Family's plea to fugitive dad on the run with children for nearly four years

The family of a father who disappeared with his three children nearly four years ago in New Zealand have broken their silence to appeal for him to return home.

In December 2021, Tom Phillips vanished into the wilderness with his two daughters and son – but his family have said they still remain hopeful “today will be the day you all come home”.

Phillips, along with Jayda, now aged 12, Maverick, 10, and Ember, nine, were last believed to have been seen in a “credible sighting” last October hiking through a bush area near Marokopa on the country’s North Island.

For the first time, his family have directly appealed to Phillips in the hope that “just maybe, he’s going to see this” and “that we are here for him”.

In an interview with New Zealand journalist Paddy Gower, his sister Rozzi Phillips said she missed being part of her brother’s life, adding “I really want to see you” and “you’re very special to me”.

She also read out a handwritten message from Phillips’ mother, Julia, which came from her “heart, just to her son”.

“Tom, I feel really sad that you thought you had to do this, not considering how much we love you and could support you,” she said.

“It hurts every time I see photos of the children and of you and see some of your stuff that is still here, thinking what could have been if you’d not gone away.”

According to New Zealand news site, Stuff, the letter ended with a message for the three children.

“We love you so much and really miss being part of your lives,” it read.

“Every day we wake up and hope that today will be the day you all come home.”

Ms Phillips said her brother is a skilled builder and would have constructed a shelter.

Police believe his actions could be linked to a custody battle.

There have been numerous reported sightings since December 2021.

The most recent last October was said to be from a distance when the group were seen wearing camouflage gear and carrying large camping backpacks.