Nadhim Zahawi has released a statement on recent ‘confusion about his finances’ in which he failed to address details of a reported ‘million pound’ fine to the taxman.
The Tory party chairman is under pressure after it was claimed he paid a penalty of more than £1m to settle a probe into his tax affairs.
The former chancellor 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”.
He does not address reports of a penalty or how much he was fined to settle any probe into his tax affairs amid mounting questions over his personal payments to HMRC.
The news that Mr Zahawi was forced to pay a penalty – part of a reported total tax settlement of almost £5m – comes as The Independent revealed he tried to gag this newspaper from revealing that he was being investigated by the National Crime Agency and HMRC last year.
The statement, released on Saturday afternoon, said: “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.”
Labour have called on the prime minister to sack Mr Zahawi, with Debuty Leader Angela Rayner calling his position “untenable”.
The Sun on Sunday reported that he had settled a tax dispute relating to an offshore company registered in Gibraltar to hold shares in the polling company that he co-founded, YouGov.
YouGov’s 2009 annual report showed a more than 10 per cent shareholding by the Gibraltar-registered Balshore Investments Ltd, and described the company as the “family trust of Nadhim Zahawi”. At the time Mr Zahawi was an executive director of YouGov.
Mr Zahawi’s statement went on to add: “Following discussions with HMRC, they agreed that my father was entitled to founder shares in YouGov, though they disagreed about the exact allocation. They concluded that this was a ‘careless and not deliberate’ error.
“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.
“Additionally, HMRC agreed with my accountants that I have never set up an offshore structure, including Balshore Investments, and that I am not the beneficiary of Balshore Investments. This matter was resolved prior to my appointments as chancellor of the duchy of Lancaster and subsequently chairman of the party I love so much. When I was appointed by the Prime Minister, all my tax affairs were up to date.”
On Saturday Dominic Raab defended Mr Zahawi. The Deputy Prime Minister told Sky News: “Look, 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.”
Asked whether he is confident that Mr Zahawi is being open and honest about his tax affairs, Mr Raab said: “Yes, I think he has been in the way I’ve described.”
Rachel Reeves responded by saying Rishi Sunak should sack Nadhim Zahawi as Tory party chairman.
Labour’s shadow chancellor said: “Dominic Raab, who’s being investigated for bullying, is passing judgment on Nadhim Zahawi, who’s just had a £1 million fine for not paying his taxes on time. That pretty much epitomises this Conservative Cabinet…
“A few months ago, he was Chancellor of the Exchequer, you may forget because there were four of them last year, but 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.”
