Former chancellor Nadhim Zahawi ‘agrees to pay millions in tax’ after investigation

Former Conservative chancellor Nadhim Zahawi is said to have agreed to pay HMRC several million pounds in tax after The Independent first revealed an investigation into his financial affairs.

The Tory chairman has agreed to give a seven-figure sum to HM Revenue & Customs (HMRC) to settle a tax dispute, according to reports. Labour says there are now “serious questions to answer” for Mr Zahawi and the Prime Minister.

The Independent reported in July that HMRC officials were examining the tax affairs of the senior Tory figure after a probe launched by the National Crime Agency (NCA) in 2020.

Mr Zahawi was both chancellor and running for the Tory leadership in the summer of last year when a senior Whitehall source confirmed that the tax matter with the HMRC was “unresolved”.

The initial NCA inquiry was codenamed “Operation Catalufa” and is understood to have involved the agency’s International Corruption Unit.

There is no suggestion of any wrongdoing by Mr Zahawi, and the senior MP had said he knew nothing about the NCA investigation until contacted by The Independent.

The Tory chair gave HMRC a “seven-figure” sum to settle a tax row related to Gibraltar-registered Balshore Investments – used to hold shares in the YouGov polling company he co-founded – according to the Sun on Sunday.

A spokesperson for Mr Zahawi did not deny the tax bill amounted to several million, and told The Independent: “As he has previously stated, Mr Zahawi’s taxes are properly declared and paid in the UK. He is proud to have built a British business that has become successful around the world.”

The senior Tory claimed to be the victim of a “smear” campaign after details of the tax inquiries were revealed – but vowed to “answer any questions that HMRC has of me”.

Labour chair Anneliese Dodds there were “serious questions to answer” for both Mr Zahawi and Rishi Sunak.

“Why did Nadhim Zahawi claim last summer that he had paid his taxes in full, and that he wasn’t aware of an investigation?” she asked. “When was he made aware of an investigation? Was the prime minister aware of an investigation when he appointed Nadhim Zahawi to the cabinet?”

“Finally, why did Nadhim Zahawi claim he was not a beneficiary of his family trust – Balshore Investments – when records show that the money he owed YouGov was paid from the trust?

“Not for the first time, Rishi Sunak’s judgement has been called into serious question. The question remains: is he strong enough to sack Nadhim Zahawi?”

Mr Zahawi vowed to publish his tax returns if he won the Tory leadership contest and became prime minister, before being eliminated at the first round of voting and throwing his weight behind Liz Truss.

The Tory chair initially backed Boris Johnson for the leadership when Ms Truss resigned in October, but later switched his support to Mr Sunak.

The 55-year-old was born in Iraq and came to the UK as a child when his Kurdish family fled Saddam Hussein’s regime, before becoming the MP for Stratford-upon-Avon in 2010.

Mr Zahawi made his fortune with online polling company YouGov and was also chief executive of Gulf Keystone Petroleum until 2018.

A spokesperson for HMRC said: “We cannot comment on identifiable taxpayers.”