London Daily

Focus on the big picture.
Wednesday, Jul 23, 2025

Nadhim Zahawi’s job hangs by a thread as Rishi Sunak orders inquiry

Nadhim Zahawi’s job hangs by a thread as Rishi Sunak orders inquiry

Labour seek to turn heat on PM after he orders probe into Tory party chairman’s tax settlement with HMRC

Rishi Sunak is under pressure to reveal whether he knew about embattled Nadhim Zahawi’s tax affairs when he appointed him to his Cabinet.

The Prime Minister has ordered his independent adviser on ministerial interests to probe the Tory party chairman’s tax settlement with HM Revenue and Customs, stating that “clearly in this case there are questions that need answering”.

But he faced fresh questions over the affair on Monday as Labour demanded to know when Mr Sunak knew about Mr Zahawi’s tax issues.

The furore centres around an agreement that Mr Zahawi reached with the taxman over the sale of shares in the polling company YouGov, which he co-founded.

Mr Zahawi is believed to have paid a penalty as part of the deal reportedly reached when he was chancellor, taking the total estimated settlement to around £4.8 million, though the figures have not been confirmed.

Mr Zahawi claimed that his “error” over the YouGov shares was “careless and not deliberate”. But his future as party chairman has been cast into doubt by Mr Sunak’s move.

Labour also sought to turn up the heat on Mr Sunak.

Deputy leader Angela Rayner told MPs on Monday afternoon: “We may have a carousel of ministers but it’s the same old excuses every single time.

“Reports that the then chancellor of the exchequer agreed a settlement with HMRC, including a penalty, raise serious concerns, not just about that case but standards in this entire Government.”

Ms Rayner asked when Mr Sunak knew about the issues connected with Mr Zahawi, adding: “Why was it kept secret? Is there no system in place to prevent a person being actively investigated for unpaid tax being appointed to run the UK’s tax system? Maybe it’s that absurd that no-one would ever think it would happen.”

Cabinet Office minister Jeremy Quin said the Prime Minister would have had “full disclosure” regarding Mr Zahawi’s interest, as disclosed when he appointed him Conservative Party chairman.

On a visit to Northampton hospital, the Prime Minister said: “Integrity and accountability is really important to me and clearly in this case there are questions that need answering.

“That’s why I’ve asked our independent adviser to get to the bottom of everything, to investigate the matter fully and establish all the facts and provide advice to me on Nadhim Zahawi’s compliance with the ministerial code.

“I’m pleased that Nadhim Zahawi has agreed with that approach and has agreed to fully co-operate with that investigation.”

Nadhim Zahawi leaves Conservative Campaign Headquarters

Mr Sunak’s decision to order the inquiry appeared to be at least partly based on him seemingly not knowing before the weekend that Mr Zahawi had reportedly paid a penalty as part of his settlement with HMRC.

Asked if the PM had not known about the alleged penalty before the weekend, the Prime Minister’s official spokesman said: “That is my understanding.”

The investigation will in the “first instance” examine whether Mr Zahawi properly declared his tax situation, according to the ministerial code.

But it could also look into the settlement with HMRC itself and the accuracy of statements made by the party chairman to the media about his tax affairs.

The spokesman added that the Prime Minister had been “assured” by the Cabinet Office before Mr Zahawi’s appointment that there were no “outstanding issues” which meant he should not have given him a Cabinet post.

The row came as it was revealed the public appointments watchdog is to investigate the selection of BBC chairman Richard Sharp amid concerns over his role in helping Boris Johnson secure a loan.

William Shawcross, the commissioner for public appointments, said he is to review the way competition for the post was run to ensure it was in compliance with Whitehall rules.

Earlier Mr Sharp announced that he was referring his appointment to the nominations committee of the BBC board following claims of a possible conflict of interest.

On Mr Zahawi, the Prime Minister said the ethics adviser, Sir Laurie Magnus, had been requested to “fully investigate this matter and provide advice to me on [his] compliance with the ministerial code”.

He added that on the basis of his findings “we’ll decide on the appropriate next steps”.

Mr Sunak confirmed Mr Zahawi would continue in his role as Conservative party chairman.

“As is long-standing practice, he will continue to play the role he does,” he said.

In a statement, Mr Zahawi said: “I am confident I acted properly throughout and look forward to answering any and all specific questions in a formal setting to Sir Laurie.”

But Labour called for Mr Sunak to sack his party chairman.

Shadow business secretary Jonathan Reynolds told Sky News: “The position to me is completely untenable. I don’t think the excuses are compelling... and the sums of money here are not small.”

Mr Sunak is also facing scrutiny over his decision to re-appoint Dominic Raab as Deputy Prime Minister and Justice Secretary.

Mr Raab is facing a series of bullying claims from his earlier time in Cabinet which are being investigated by senior lawyer Adam Tolley KC.

The Deputy Prime Minister denies any wrongdoing.

But senior Tory MP Tim Loughton said he would have to “take the consequences” if more emerges about his tax affairs. The former minister added that he believes Mr Sunak “will take the appropriate action” if more damaging details emerge about Tory party chairman Mr Zahawi’s tax settlement with HMRC.

Former Downing Street communications chief Sir Craig Oliver said Mr Zahawi is “hanging on by a thread” in his post.

“The problem for Nadhim Zahawi at the moment is it doesn’t all add up.”

Earlier Mr Zahawi had sought to end questions about his tax affairs by releasing a statement.

When YouGov was set up, Mr Zahawi reportedly did not take any shares in it but a 42.5 per cent shareholding was allegedly received by Balshore Investments, a Gibraltar company held by an offshore trust controlled by his parents.

He admitted that questions were raised about his tax affairs when he was being appointed Chancellor.

Mr Zahawi said: “Following discussions with HMRC, they agreed that my father was entitled to founder shares in YouGov, though they disagreed about the exact allocation,” he said.

“They concluded that this was a ‘careless and not deliberate’ error.”
Newsletter

Related Articles

0:00
0:00
Close
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
×