Nadhim Zahawi sacked as UK Conservative party chair over tax affairs

UK prime minister Rishi Sunak has sacked the Conservative party chair, Nadhim Zahawi, after he was found to have breached the ministerial code over his tax affairs.

The former chancellor has faced extensive questions in parliament and the media after it emerged he agreed to pay millions to HM Revenue & Customs (HMRC) following a settlement with the tax department.

In a letter to the Tory party chair, Sunak said the ethics adviser, Sir Laurie Magnus, had concluded there was a “serious breach” of the ministerial code. “As a result, I have informed you of my decision to remove you from your position in His Majesty’s Government,” he said.

The prime minister, who had promised “integrity, professionalism and accountability at every level” of his government had been under growing pressure to sack Zahawi from the cabinet, with his judgment coming under question from Tory MPs for reappointing him.

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The HMRC investigation into Zahawi began in April 2021, including a meeting with the minister and his advisers in June 2021. Zahawi told the ethics adviser he had “formed the impression” he was simply being asked questions over his tax affairs. But Magnus said Zahawi should have understood he was under serious investigation.

The minister failed to declare the HMRC investigation to the Treasury’s permanent secretary after his appointment as chancellor by Boris Johnson on July 5th, 2022. By that stage the investigation had been ongoing for more than a year; however, Zahawi only updated his declaration on July 15th of last year.

Zahawi committed a second breach of the ministerial code by failing to disclose the fact he had paid a penalty for tax avoidance when he was first appointed to Liz Truss’s cabinet last September, and then to Sunak’s in October.

He had reached a settlement with HMRC in August 2022, but it was not until January 20th this year that the details came to light, after the Guardian was told he had paid a penalty imposed by HMRC. He issued a statement the following day, saying the tax office had concluded that he had made a “careless but not deliberate” error.

In his letter to Sunak, the ethics adviser said: “Taken together, I consider that these omissions constitute a serious failure to meet the standards set out in the ministerial code.”

In his own letter to the prime minister, Zahawi did not apologise or explicitly mention the findings of the ethics inquiry into his tax affairs, and suggested that he planned to stay on as an MP “in the coming years”, despite calls to step down.

However, he raised concerns about some media conduct in recent weeks, which he said went beyond legitimate scrutiny of his tax affairs. He singled out a piece in the Independent, headlined “The noose tightens”, which was about calls from fellow Conservative MPs for him to resign.

- Guardian