Nadhim Zahawi, the now former Chair of the Conservative Party, failed to disclose HMRC’s investigation into his tax affairs. As a result, Rishi Sunak sacked him from his Cabinet position on Sunday. Impact’s Hannah Walton-Hughes reports.
Nadhim Zahawi, Cabinet Minister under both Boris Johnson and Liz Truss, was appointed as Chair of the Conservative Party when Rishi Sunak rose to power. However, after it was discovered that he had committed a “serious breach” of the Ministerial Code, by failing to declare that HMRC had investigated his tax affairs, the Prime Minister took the decision to sack him.
Zahawi was reported to have paid nearly £5 million as a settlement fee, which included a penalty fine. The tax error related to his father’s shares in the online polling company, YouGov, which Zahawi himself set up.
[HMRC] have labelled Mr. Zahawi as being “careless” rather than “deliberate”
This tax dispute occurred when Nadhim Zahawi served as Chancellor of the Exchequer. HMRC have also specifically stated that they do not issue fines over innocent mistakes, but have labelled Mr. Zahawi as being “careless” rather than “deliberate.”
Nevertheless, this most recent scandal is only adding to the pressure on Rishi Sunak. The Prime Minister’s Deputy, Dominic Raab, is already under investigation following bullying claims.
Initially, the Prime Minister stated that he believed all procedures had been followed, but then admitted that new information had come to light. As a result, he ordered the government’s new Ethics Advisor, Sir Laurie Magnus, to carry out an investigation. After it was found that the Ministerial Code had been broken, the PM issued a letter which dismissed Zahawi from his role.
The response from Zahawi lacked contrition
In his letter, the PM stated that the sacking was necessary, after he had pledged to rule with “integrity, professionalism and accountability at every level.” Despite this, he still commended Zahawi on his role as Under-Secretary of State for COVID-19 Vaccine Deployment during the pandemic and told him he should be “extremely proud” of “wide-ranging achievements.”
The response from Zahawi lacked contrition, but instead emphasised his belief that the media had treated him unfairly. Back in July 2022, he threatened to take legal action against The Independent, after they had said they were planning to report the fact the HMRC was investigating his taxes. He had further commented to Sky News that he had been “smeared”.
His response letter to Rishi Sunak reinforced his concern about the media coverage of events and apologised to his family but not to the public.
The PM denies claims that he was informally warned
Whilst many do defend the PM, saying that he acted swiftly, questions remain about how much Rishi Sunak was aware of when he appointed Zahawi as Chair. And, indeed, how much Sunak’s predecessors Liz Truss and Boris Johnson knew.
Zahawi claimed that when initial concerns were raised, he discussed them with the Cabinet Office. However, the PM denies claims that he was informally warned about the reputational damage that could be caused by appointing a Minister with this tax background.
Nadhim Zahawi has therefore returned to the backbenches. He has pledged to continue to support Rishi Sunak, but it is unclear how much of a grudge he might hold.
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