Nadhim Zahawi claims tax error was careless and not deliberate

• Nadhim Zahawi says he paid a tax bill to HM Revenue and Customs (HMRC).
• HMRC has concluded that Nadhim Zahawi’s tax affairs were in order.
• When he was appointed chancellor of the duchy of Lancaster.

Nadhim Zahawi, the chairman of the Tory Party, claims that HMRC recognized one of his tax-related mistakes as having been “careless and not malicious.”

In a statement, he said he wanted to address “confusion about my finances” after claims he tried to avoid tax and had to pay it back.

He said he had chosen to “settle the matter and pay what they said was due, which was the right thing to do”.

The previous chancellor should be fired, according to Labor.

The Guardian claims that Mr. Zahawi was required to pay £4.8 million in late taxes plus a 30% penalty.

Neither the amount of money Mr. Zahawi paid to HMRC nor the existence of a penalty is specified in his statement.

If tax is not paid in the proper amount at the right time, penalties may be imposed.

In the statement issued on Saturday afternoon, Mr. Zahawi said: “As a senior politician I know that scrutiny and propriety are important parts of public life.

Twenty-two years ago I co-founded a company called YouGov. I’m incredibly proud of what we achieved.

It is an amazing business that has employed thousands of people and provides a world-beating service.

When we set it up, I didn’t have the money or the expertise to go it alone. So I asked my father to help. In the process, he took founder shares in the business in exchange for some capital and his invaluable guidance.

Twenty one years later, when I was being appointed chancellor of the exchequer, questions were being raised about my tax affairs. I discussed this with the Cabinet Office at the time.

“Following discussions with HMRC, they agreed that my father was entitled to founder shares in YouGov, though they disagreed about the exact allocation. They concluded that this was a ‘careless and not deliberate’ error.

“So that I could focus on my life as a public servant, I chose to settle the matter and pay what they said was due, which was the right thing to do.

“Additionally, HMRC agreed with my accountants that I have never set up an offshore structure, including Balshore Investments, and that I am not the beneficiary of Balshore Investments.

This matter was resolved prior to my appointments as chancellor of the duchy of Lancaster and subsequently chairman of the party I love so much. When I was appointed by the prime minister, all my tax affairs were up to date.”

Gibraltar is where Balshore Investments is registered for tax purposes. Questions have been raised about whether Mr. Zahawi used Balshore to hold shares in YouGov, the polling firm he co-founded in 2000. He has always denied this.

Balshore was described as the “family trust of Nadhim Zahawi, an executive director of YouGov”, in the polling firm’s 2009 annual report.

The chairman of the Conservative Party, however, has denied profiting from or having any connection to the business.

Speaking before Mr Zahawi’s fresh statement on Saturday, Labor deputy leader Angela Rayner said: “The position of the man who was until recently in charge of the UK’s tax system and who this prime minister appointed Conservative Party Chair is now untenable.

“It’s time for Rishi Sunak to put his money where his mouth is and dismiss Nadhim Zahawi from his cabinet.”

But Deputy Prime Minister Dominic Raab said Mr Zahawi had been “very transparent” about the matter, saying: “He has been clear that all of his tax owed to HMRC are up to date and paid in full.

He added: “If he needs to answer any further questions I’m sure he’ll do so”.

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