Nadhim Zahawi latest news: Former Tory chair calls on successor to ‘step aside’ in tax row

A former Conservative Party chairman has called on Nadhim Zahawi to “step aside” whilst he is investigated over his tax debacle.

Sir Jake Berry remarked on BBC Question Time that stepping aside would be the “right thing to do now.”

“The government needs to find a mechanism for ministers and MPs who under investigation in this way to step aside, to clear their name and then to come back into government if that is appropriate”, Sir Berry added.

A mathematician who was born in Russia and has spoken out against Vladimir Putin’s war in Ukraine was the UK’s biggest taxpayer last year.

The Sunday Times tax list revealed on Friday that 100 wealthy people or families contributed nearly £5.2 billion in tax in the UK last year.

Nearly £1 in every £10 of this came from just one man – Moscow-born Alex Gerko, who set up XTX Markets in 2015 and is co-chief executive of the trading business.

Last year he paid £487.4 million in tax, making him the biggest single taxpayer in the country.

Editorial: If he is to make any progress in the 18 months or so left until the next general election, he needs a team he can trust to stay out of trouble, carry out policies and ‘deliver’.

Rishi Sunak has maintained he will wait for the results of the investigation into Nadhim Zahawi despite HMRC boss Jim Harra saying there are “no penalties for innocent errors”.

Speaking to broadcasters at Chequers, the Prime Minister’s grace-and-favour country retreat, he said: “I’m not going to pre-judge the outcome of the investigation, it’s important that the independent adviser is able to do his work.

“That’s what he’s currently doing, that’s what I’ve asked him to do and I’ll await the findings of that investigation.”

The Tory chair claimed he had “acted properly” with his tax affairs and that officials had judged his error to have been “careless and not deliberate”.

“If you take reasonable care but nevertheless make a mistake, whilst you will be liable for the tax and for interest … you would not be liable for a penalty,” Mr Harra told the public accounts select committee on Thursday.

Chancellor Jeremy Hunt will dismiss misplaced “gloom” about the prospects for the UK economy, saying Britain stands ready to take advantage of its Brexit “freedoms” to become a new world leader.

In a keynote speech on Friday, Mr Hunt will deliver an upbeat message, saying: “Declinism about Britain was wrong in the past and it is wrong today”.

But despite the optimistic tone, the Chancellor is expected to continue to resist calls from some Tory MPs for tax cuts to kick-start flagging economic growth.

Instead he will say the UK should exploit the opportunities provided by the UK’s withdrawal from the EU to raise productivity while using the proceeds of growth to support public services.

Nadhim Zahawi has authorised HM Revenue & Customs to pass details of his tax affairs to the Prime Minister’s ethics adviser – who is investigating if he broke the rules for ministers – as Rishi Sunak continued to resist calls to sack him.

Pressure on the Tory Party chairman, who has admitted paying a penalty as part of an estimated £4.8m settlement with HMRC, intensified after the head of the organisation said such penalties were not issued for “innocent errors”.

A source close to Mr Zahawi said that he has now given HMRC permission to speak to Sir Laurie Magnus who is investigating whether his actions represented a breach of the Ministerial Code of Conduct.

Earlier, giving evidence to MPs, the head of HMRC Jim Harra said that while he could not comment on individual cases there were “no penalties for innocent errors in your tax affairs”.

Speaking during a Cabinet away day at Chequers – his grace-and-favour country residence – Mr Sunak said he would wait for Sir Laurie’s report before making any decisions while refusing to be drawn on when he had learned his minister had paid the reportedly 30 per cent penalty.

A refrain often heard in Westminster, when decisions need to be made, is, “you have to think about the politics”.

In a democratic system, people have to be persuaded – whether at the ballot box or the voting lobbies – and the role of the marketing team ultimately belongs to senior politicians. You can, of course, present facts and push the evidence, but people make political choices with more than a hint of emotion. Being too “clever” quite often goes against you.

Read Furvah Shah’s report.

Rishi Sunak is said to be “livid” with Nadhim Zahawi as the fallout of the party chairman’s tax affairs continues.

The prime minister has not spoken to his party chairman since he revealed details of his settlement with HM Revenue and Customs at the weekend, it has been reported.

He is said to be frustrated that his colleague initially failed to disclose that he had paid a penalty for tax avoidance as part of an estimated £4.7 million settlement.

The ongoing row centres on a tax bill over the sale of shares in YouGov, the polling firm Mr Zahawi founded. The shares, worth an estimated £27m, were held by Balshore Investments, a company registered offshore in Gibraltar and linked to Mr Zahawi’s family.

Here is how the controversy has played out: