Tory chairman Nadhim Zahawi comes under further pressure amid tax row

Embattled Conservative chairman Nadhim Zahawi is under renewed pressure following revelations that he was cleared by Whitehall chiefs to take on two Cabinet roles under Liz Truss despite paying a fine over his taxes.

Ms Truss appointed Mr Zahawi as Cabinet Office minister in September without being warned by civil servants over his tax affairs, The Times reported.

In October, he was a contender alongside Jeremy Hunt to become Chancellor but no again no concerns were raised by officials. 

Mr Zahawi paid £4.8 million to HMRC as part of a settlement for not paying the correct amount of tax, a figure which included a 30 per cent penalty. 

Conservative Party chairman is under growing pressure over his multi-million pound tax settlement with HMRC

Former Prime Minister Liz Truss was reportedly not told about Mr Zahawi’s tax affairs when she appointed him Cabinet Office secretary and considered re-appointing him Chancellor

When Rishi Sunak became Prime Minister later that month, he was also not informed about Mr Zahawi’s tax situation.

This is despite the fact that Mr Zahawi had settled his tax issues with HMRC while he was Chancellor under Boris Johnson.

The lack of warning over his tax affairs to either Mr Sunak or Ms Truss has led some to question the role of Cabinet Secretary Simon Case, the civil servant responsible for advising the Prime Minister on ethical issues.

One source suggested that Mr Case was not aware of the situation because he had not been told by HMRC. Another said that the proprietary and ethics team which scrutinises ministerial appointments was unable to deal with the situation in the face of a string of scandals within the government.

This latest revelation about Mr Zahawi’s taxes will intensify pressure on the Prime Minister to sack him from the cabinet.

Labour leader Sir Keir Starmer will likely press the issue at Prime Minister’s Questions later today following calls for Mr Zahawi to go. 

Rishi Sunak was also not told about the tax issue by Whitehall officials when he appointed Mr Zahawi to his cabinet

Rishi Sunak has ordered his ethics adviser to investigate whether Mr Zahawi broke ministerial rules over the estimated £4.8 million bill he settled with HMRC while Chancellor.

Mr Sunak admitted there are ‘questions that need answering’ as the inquiry was launched.

Chairman of the Committee on Standards in Public Life Lord Evans criticised the legal threats Mr Zahawi made as he tried to prevent stories about his tax affairs emerging.

As they worked to uncover the situation, The Independent website said he personally threatened ‘legal action’ and tax lawyer Dan Neidle was contacted by ‘expensive’ libel lawyers.

Lord Evans suggested ‘trying to close down a legitimate public debate’ would not live up to the Nolan principles on public life that must be upheld under the ministerial code.

‘Accountability, openness are things which the Government says that it wants to be characterising its own behaviour, so that I think speaks for itself,’ he told BBC Radio 4’s PM programme.

‘The sort of attempts, apparent legal attempts to suppress this story, I don’t think that does live up to the sort of standards that the public would rightly expect.’

Mr Zahawi, the MP for Stratford-upon-Avon, has insisted his ‘error’ over shares in the YouGov polling company he co-founded was ‘careless and not deliberate’. 

He has insisted he is ‘confident’ he has ‘acted properly throughout’. 

Labour has argued Mr Sunak should sack the chairman before the investigation’s conclusion, describing it as a ‘pathetic attempt to pass the buck’. 

Mr Zahawi was appointed chancellor by Boris Johnson, whose time in No 10 was continuing to create challenges for Mr Sunak. 

Fresh allegations of cronyism in the Tory party have been levelled after it emerged BBC chairman Richard Sharp helped secure Mr Johnson a loan of up to £800,000 before the then-Prime Minister backed his appointment to the broadcaster. 

Since the last PMQs, Mr Sunak has also received a second police fine, this time for failing to wear a seatbelt after he broke coronavirus rules during the partygate scandal.