The head of the Conservative Party, Nadim Al Zahawi, is currently under investigation over a multi-million pound tax dispute.

On Monday, Prime Minister Rishi Sunak asked the new ethics adviser Sir Laurie Magnus To assess whether the ministerial act has violated ministerial law with the HMRC settlement he did while he was a consultant.

“It is clear in this case that there are questions that need to be answered,” he told reporters.

Al-Zahawi said It is “clearly smeared” On questions about his tax affairs – and that he did not “benefit” from an “external credit”.

Mr. Sunak He is under increasing pressure to remove Mr. Zahawi from his senior ministerial position.

But what do we know about it so far?

Who is Nadim Al Zahawi?

Formerly an aide to his Conservative counterpart Lord Archer, Zahawi, with another aide Stephen Shakespeare, founded the YouGov polling firm at the turn of the millennium.

In 2010 he set his sights firmly back on politics, becoming MP for Stratford-upon-Avon.

He was given his first junior minister yet – education minister – in 2018, but became a household name after the spread of COVID in the UK and was appointed by a former prime minister Boris Johnson as a vaccine minister.

“Game Over” by Zahawi – the latest political news

Performance propelled him into the Cabinet, and in September 2021, he took over as Senior Secretary of State, returning to the Ministry of Education.

He was thrust into the Chancellor position in the last days of the premiership after the resignation of Rishi Sunak.

Al-Zahawi made an unsuccessful bid for the premiership after Johnson’s dismissal – losing to Liz Truss – but was appointed Chancellor of the Duchy of Lancaster.

He became chairman of the Conservative Party just weeks later when Ms Truss’ presidency collapsed and Sunak was given the keys to No. 10.

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What’s going on with Zahawi’s taxes?

What is the controversy about?

In January 2023, The Sun On Sunday published a report alleging that Mr Al Zahawi paid a seven-figure sum to settle a dispute with HMRC over sales of his YouGov shares.

The shares, valued at around £27m, were owned by Balshore Investments, a Gibraltar-registered offshore company linked to Mr Al-Zahawi’s family.

Sky News understands that as part of a settlement with HMRC, Mr Al Zahawi has paid a fine to the tax collector.

The exact size of the settlement has not been disclosed, but is said to be an estimated £4.8m, including a 30% fine.

By Monday, it was Mr. Sunak He ordered a potentially far-reaching investigation To Mr Al Zahawi to be moderated by the new Ethics Adviser to the Prime Minister Sir Laurie Magnus.

Sir Lowry is expected to focus on whether the ministerial secretary breached ministerial law with an estimated £4.8m HMRC settlement he did while he was a consultant, But it could extend to his past tax arrangements and whether he lied to the media.

It is not clear 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 Al-Zahawi said that he “does not concede at all.”

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Nadim Zahawi asked if he would resign

What did Zahawi say?

Last July, it was reported that Human Resources was investigating Mr Al Zahawi’s tax affairs – but a spokesperson at the time said he was “not aware of any official investigation by HMRC” and insisted his “taxes are paid in full and up to date”.

The next day, allegations surfaced that officials had raised concerns about Mr. Zahawi’s tax affairs before he was appointed as a minister in Mr. Johnson’s cabinet.

When the issue of his tax affairs came to light in an interview with Sky News as Mr Al Zahawi was preparing to launch his leadership campaign, Al Zahawi said: “I have obviously been defamed.

“I’ve been told that the Serious Fraud Office, the National Crime Agency, and the Human Resources Management Authority (HMRC) are looking at me. I’m not aware of this.”

It is not clear when Mr. Al-Zahawi first learned of the HMRC investigation, but allies say he reported this to the Cabinet Office decency and ethics team prior to his appointment.

Over the weekend, Al Zahawi said HMRC had concluded there was a “negligible and unintentional” error in the way the founders’ shares, which he allotted to his father, were treated.

He added in a statement on Monday, following the Prime Minister’s announcement that an inquiry into the matter would be launched, “I am confident that I have acted correctly throughout and look forward to answering any and all specific questions at a formal hearing for Sir Lowry.”

Mr. Al-Zahawi did not confirm the amount of the penalty or the value of the overall settlement with HMRC.

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“Questions need to be answered” in the Zahawi case, says the prime minister

What did the prime minister say?

The prime minister has ordered his ethics adviser to investigate whether Mr Zahawi breached ministerial rules over the £4.8m bill.

A week ago, Sunak told MPs that Mr Zahawi had “really dealt with the whole matter” – but Downing Street later revealed that the prime minister was unaware that the Tory chairman had paid a fine to the HRC as part of the settlement.

Sunak admitted there were “questions that need to be answered” as the investigation began, and it is not clear what he knew when Mr Zahawi was appointed to the post of prime minister.

Read more:
What do we know about the tax affairs of the head of the Conservative Party, Nadim Al-Zahawi?
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Downing Street later suggested that Mr Sunak did not know last week that Mr Zahawi had paid a 30% fine to HMRC.

The prime minister said the advice he had received prior to Mr Zahawi’s appointment as party chairman in October was that there was “no reason” not to do so.

Sunak has so far resisted mounting calls to remove Zahawi from his current post.

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“Zahawi should stand aside,” says Lord Hayward of the Conservative Party

Who invited him to go?

Former minister Caroline Knox said there was “So many unanswered questions.” On the tax dispute, she called on Zahawi to “step aside and let the investigation take its course.”

Speaking to Sky News on Tuesday, Lord Hayward agreed the Tory chairman should consider ‘stepping aside’ Parliament’s ethics watchdog is investigating his tax affairs.

“We don’t know what the timelines for the investigation are, and I think that’s the key,” he said.

“I think he should consider whether to step down for the investigation period.”

But Home Secretary Chris Philp said on Monday that Zahawi should be treated as “innocent until proven guilty” and that it was “reasonable” for him to continue as party leader.

He said, “The investigation was launched by the prime minister, and this is the right thing to do. It will get to the bottom and then the prime minister will make his decision,” he said.

“But I don’t think it’s fair to jump to any conclusions before the investigation is over.”

The Labor Party said Zahawi’s admitted negligence should lead to his removal from government.

Shadow foreign secretary David Lammy told Sky News: “When you were Chancellor of the Exchequer and said you were careless despite the fact that offshore trusts were set up in Gibraltar, I’m sorry, you really should resign or be fired.”

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“I regret not wearing a seatbelt.”

What does this mean for the prime minister?

Zahawi’s tax saga formed one of two controversies that Sunak has been forced to grapple with this week, with questions also being raised over the decision to appoint Richard Sharpe as BBC chairman while he was said to have helped ex-boss Johnson secure a higher-value loan. . to £800,000.

The prime minister also distanced himself from the claim, saying that the appointment of the president was made by “one of my predecessors”.

But those two incidents add to a turbulent first few months that Sunak has been ranked 10th in.

On his first day as prime minister in October, Mr Sunak pledged to restore “integrity and accountability” to the government – a promise that has now been called into question by a series of events.

Just days after entering No. 10, the prime minister was forced to defend the reappointment of Soella Braverman as home secretary days after she resigned over data breaches.

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Labor leader Sir Keir Starmer has accused the new prime minister of striking a “dirty deal” with Ms Braverman to secure her support in the Conservative leadership contest.

An independent investigation has also been launched into the conduct of another Cabinet member – Deputy Prime Minister Dominic Raab – after he was the subject of multiple complaints of bullying.

Sunak initially sided with the justice minister – who reappointed him to the post in the fall – but eventually bowed to pressure to allow an official investigation.

On top of that, the prime minister received a second fine from the police last week, this time for failing to wear a seatbelt.

The first was received last year after it broke coronavirus rules during the Partygate scandal.



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