Nadhim Zahawi is SACKED by Prime Minister Rishi Sunak over tax row after ‘serious breach’
NADHIM Zahawi has been sacked by Rishi Sunak.
The Prime Minister told the Tory chairman in a letter that it is “clear that there has been a serious breach of the Ministerial Code”.
He wrote: “When I became Prime Minister last year, I pledged that the Government I lead would have integrity, professionalism and accountability at every level.
“That is why, following new information which came to light in recent days regarding your personal financial arrangements and declarations, I asked Sir Laurie Magnus, the independent adviser on ministers’ interests, to fully investigate this matter.
“You agreed and undertook to co-operate fully with the inquiry.
“Following the completion of the independent adviser’s investigation – the findings of which he has shared with us both – it is clear that there has been a serious breach of the ministerial code.
“As a result, I have informed you of my decision to remove you from your position in His Majesty’s Government.”
Mr Zahawi, 55, was engulfed in a row over his taxes while he was in charge of Britain’s tax system as Chancellor.
He was hit with a £4.8million bill from HMRC – including a penalty of more than a million over his offshore tax arrangements.
It was one of the highest payouts agreed by tax officials last year.
A source said: “In any given year £1m would be a big sum for basic tax avoidance by an individual.
“Most amounts tend to be in the £100,000s so almost £5m is an extraordinary amount.”
The PM and his Government had faced questions for several days about the dispute, with growing pressure on Mr Zahawi to stand aside.
He was blocked from getting a knighthood in the New Year’s honours list after Whitehall officials contacted counterparts at the HMRC.
Mr Zahawi, who is worth more than £100m, insisted that any tax mistakes were “careless and not deliberate error”.
The row centres on the tax bill following the sale of shares in YouGov, the polling firm he co-founded, worth an estimated £27m.
Questions were asked whether the mega-rich MP avoided tax by using an offshore company.
His family trust, Gibraltar-registered Balshore Investments, held a stake worth more than £20m but sold up by 2018.
Mr Zahawi, who ran for Tory leadership last year, has said he was not a beneficiary of the trust but records show money he owed to YouGov was partly repaid from Balshore dividends.
Think-tank Tax Policy has estimated that Balshore’s sale of YouGov shares should have incurred capital gains tax of around £3.7million.
In the four-page report by ethics adviser Sir Laurie Magnus, he said Mr Zahawi had “shown insufficient regard for the general principles of the Ministerial Code” and not fulfilled the requirements of being an “honest, open and an exemplary leader”.
It is clear that there has been a serious breach of the ministerial code.
Rishi Sunak
Speaking shortly after Mr Sunak‘s swift decision, which came following reports he was “livid” with his Cabinet colleague for failing to mention paying the tax penalty when he was appointed in October, Michael Gove said it shouldn’t define Government.
The Levelling Up Secretary, who is Ladbrokes’ favourite to take over Mr Zahawi’s job at 4/1, said “because someone commits a lapse or a sin, that shouldn’t be automatically taken as an opportunity to damn an entire organisation or a way of working”.
He was questioned on the BBC’s Sunday With Laura Kuenssberg programme about his colleague’s departure.
Asked about a number of Tory politicians “trying to follow their own set of rules”, Mr Gove said: “There are always people who will fall short, whether it’s in politics or other parts of public life, or professional life, or in any area.”
The PM is unlikely to appoint a new Conservative chairman by the end of Sunday, it is understood.
The Liberal Democrats have called on Nadhim Zahawi to resign as an MP as they seek an independent inquiry into the affair.
Deputy leader Daisy Cooper said: “Rishi Sunak’s first 100 days in office have been tarnished by endless Conservative sleaze and scandals.
“Serious questions remain about what Sunak knew about Zahawi’s tax affairs when he appointed him.
“We need a proper independent inquiry to establish the facts and hold the Prime Minister to account.
“Given this was a serious breach of the ministerial code, Nadhim Zahawi must also do the right thing and resign as an MP.
“He has shown he is unfit to serve in Cabinet and unfit to serve the people of Stratford-on-Avon.”