Investigation into Zahawi tax matters ‘expected to take about 10 days’

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The investigation into Nadhim Zahawi’s tax affairs by the prime minister’s ethics adviser could reach a conclusion in about 10 days, a minister said.

Mel Stride, Secretary for Work and Pensions, speaking on ITV’s Peston program about how soon Laurie Magnus would report on Nadhim Zahawi’s tax affairs, said it would be “not atypical” for a conclusion to be reached within 10 days be pulled. Mr Stride said: “I can’t be drawn to an arrangement where I don’t know all the details. But the good news is that we will hear about, it sounds like, ten days from now or thereabouts from the ethics adviser, who reports to the minister president, the prime minister then has the facts and can make exactly those statements.” Mr Sunak has ordered an inquiry by his independent adviser into the interests of ministers to see whether Mr Zahawi has breached ministerial rules in relation to the estimated £4.8 million bill he has with HM Revenue & Customs (HMRC) settled when he was chancellor. Rishi Sunak previously suggested during the PMQs that it would have been “politically expedient” to fire Mr Zahawi, but stressed that “due process” means that the investigation into his tax affairs should be completed.

The prime minister acknowledged he had not gotten the full picture of the Tory chairman’s financial affairs when he told MPs last week that Zahawi had given a “full” account.

But he insisted on Wednesday that when he entered No 10 and gave Mr Zahawi the job of minister without portfolio, “there were no issues with me”.

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Downing Street could not say whether Mr Sunak fears further damaging surprises over Mr Zahawi’s tax affairs and declined to rule out the Prime Minister ever paying a tax penalty.

When questioned by the Prime Minister, Mr Sunak was challenged for a second week running over Mr Zahawi’s tax affairs by Labor leader Sir Keir Starmer, who claimed he is too “weak” to sack his embattled party chairman.

Mr Sunak said: “Of course it would be politically expedient for me to say that this issue must be resolved by 12 noon on Wednesday.

“But I believe in due process.”

Since I responded to this matter last week, more information, including a statement from the Minister without Portfolio, has entered the public domain, so it is good that we get the facts straight

A week ago, Mr Sunak told MPs that Mr Zahawi had “already fully dealt with the matter” – but Downing Street subsequently revealed that the Prime Minister was unaware that the Conservative party chairman had paid a fine to HMRC as part of the settlement .

Mr Sunak said: “Since I commented on this matter last week, more information, including a statement from the minister without portfolio, has entered the public domain, so it is good that we establish the facts.”

Sir Keir made a veiled reference to Mr Sunak’s billionaire wife, Akshata Murty, who has non-resident status, when he suggested the job at number 10 is “too big” for Mr Sunak.

The Labor leader said: “We all know why the Prime Minister was reluctant to question his party chairman about family finances and tax evasion.

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“But the fact that he has failed to sack him when the whole country can see what is going on shows how hopelessly weak he is – a prime minister overseeing the chaos, overwhelmed at every step.”

Sir Keir added: “I think anyone watching would think it’s pretty obvious that someone trying to avoid tax can’t also be taxable. But for some reason the prime minister can’t bring himself to say that or even acknowledge the question.’

The altercation sparked further questions about Mr Sunak’s own financial affairs, with his press secretary refusing to say whether Mr Sunak has also paid a fine to HMRC as he prepares to release his tax return in a bid for transparency.

“You wouldn’t expect me to get involved in the Prime Minister’s tax matters, they are confidential,” she said in remarks reminiscent of a position she once took on questions about private health care before Mr Sunak admitted there had been some use in the past to have made.

She couldn’t rule out more damaging revelations about Mr. Zahawi emerging, a sign of confidence.

“I don’t think any of us can predict what’s going to happen,” she said.

Commerce Secretary Andrew Bowie insisted that Sunak will fire his party chairman if he is found to have broken the ministerial code.

But the Prime Minister’s official spokesperson did not offer the same assurance, pointing to the ministerial code which was recently updated to indicate that “it is no longer a binary decision”.

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Mr Zahawi showed up for work at Conservative Campaign Headquarters (CCHQ) on Wednesday but did not show up at PMQs.

Conservative peer Lord Hayward joined senior Tory MP Caroline Nokes in calling for Mr Zahawi to step aside during the inquiry.

Lord Hayward told Sky News: “I think he should consider stepping aside for the period of the inquiry.”

Commons Defense Committee chairman Tobias Ellwood said the situation is “a distraction”.

The Tory MP said that now that Mr Sunak has asked Sir Laurie to look into the matter, “it makes perfect sense for the ethics adviser to report” before any further action is taken.

“These are tax matters – nobody knows the full picture on that, by the way, except Nadhim Zahawi and of course HMRC – so let’s land that report and then we have to take it from there,” he told the TUSEN.

The row concerns a tax bill over the sale of shares in YouGov, the polling agency that Mr Zahawi founded, worth an estimated £27 million, which were owned by Balshore Investments, a company registered off the coast of Gibraltar and has ties to Mr. Zahawi’s family.

Mr Zahawi said HMRC concluded there had been a “careless and unintentional” error in the way the founders’ shares, which he allocated to his father, had been treated.

Downing Street subsequently revealed that it was unaware last week that Mr Zahawi had paid a reported 30% fine to HMRC.

Mr Zahawi has maintained that he is “confident” that he “acted correctly all along”.

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