Nadhim Zahawi “Paid Fine in Seven-Figure Tax Dispute Settlement”

Nadhim Zahawi “Paid Fine in Seven-Figure Tax Dispute Settlement”

Tory Party leader Nadhim Zahawi is facing fresh questions about his tax affairs after he was accused of paying a fine as part of a multimillion-pound settlement with HMRC.

The former chancellor, who is part of Rishi Sunak’s cabinet, has been under pressure since a seven-figure sum was reportedly paid to settle a dispute.

Now the Guardian has reported that he has paid a 30 per cent penalty, bringing the estimated total to more than £4.8million.

Both Mr Zahawi’s team and the Conservative Party have been contacted about the latest allegation. None responded to refute the report.

Labor has called for an inquiry into Mr Zahawi and Deputy Leader Angela Rayner has urged HMRC to clarify the “serious questions about a potential conflict of interest”.

Tax lawyer Dan Neidle has been working to uncover the minister’s tax affairs and has estimated he owes £3.7million.

On top of the 30 per cent penalty reported by the Guardian, interest could also be levied, bringing the potential total to over £4.8million.

Mr Neidle, of think tank Tax Policy Associates, said: “You don’t pay a 30 per cent penalty if your tax affairs are in order”.

“The best you do is if you have negligently failed to pay due taxes,” he said.

The lawyer said the chances of Mr Zahawi paying a fine were “almost inevitable” after the Sun reported on Sunday that he had settled a seven-figure sum with HMRC.

When asked about the amount of the reported penalty, Mr Neidle said: “That probably means he has at least admitted no willful conduct, it probably means he has admitted negligence.”

The government website says there is a penalty of between 0 and 30 per cent if it arises from a lack of reasonable care. A willful error can be punished with a penalty of between 20 and 70 percent.

The Conservative MP is said to have evaded taxes by using a Gibraltar-registered offshore company to hold stakes in polling firm YouGov, which he co-founded.

Nadim Zahawi previously said he did not know anything about an investigation into his taxes by HMRC

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Nadim Zahawi previously said he was unaware of an investigation into his taxes by HMRC

(AFP via Getty Images)

YouGov’s 2009 annual report showed that Gibraltar-registered Balshore Investments Ltd held a more than 10% stake.

The report described the company as “the family trust of Nadhim Zahawi,” then executive director of the election office.

Ms Rayner said: “If HMRC imposed a 30 per cent penalty in this case, the British people deserve to know why, but the Conservative Party leader maintains a deafening silence.

“It is clearly in the public interest to know whether the man who until recently was in charge of Britain’s tax system accepted fault or was fined to pay his own tax bill.

“Rishi Sunak needs to explain what he knew about it and why he appointed Nadhim Zahawi to his cabinet.”

A spokesman for Mr Zahawi previously said his taxes “are properly declared and paid in the UK” and the minister “never had to hire solicitors to deal with HMRC on his behalf”.

Mr Sunak has defended his ally, saying in Wednesday’s Prime Minister’s Questions that Mr Zahawi “has already fully addressed this matter and I have nothing more to add”.

The Prime Minister’s press secretary said Mr Zahawi had “spoke to HMRC and been transparent”.

As for Mr Sunak believing the matter is now closed, she said: “I don’t know if the Prime Minister has checked it fully but I do know he is taking Nadhim Zahawi at his word.”

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