Sunak is under pressure about when he knew the Nadhim Zahawi tax inquiry

Rishi Sunak instructed his ethics advisor to investigate the tax affairs Nadhim Zahawi (Conservative party chair), but he is now under increasing pressure to prove that he knew of the HMRC inquiry before he appointed Zahawi as his cabinet member.

After suggestions that Zahawi had been forced to pay a fine as well as millions of pounds in unpaid taxes, the prime minister acknowledged that there were still “questions to answer”. This was after an investigation that took place while he was Boris Johnson’s chancellor.

Sunak’s spokesperson claimed that the prime minister did not know that Zahawi had paid a penalty HMRC. He told MPs last week that his colleague had “addressed” the matter fully. Officials also said that officials assured him that there were no outstanding issues when he appointed Sunak.

According to a source within the government, Downing Street knew of a penalty in a settlement with HMRC, when Sunak appointed Zahawi (also a Cabinet Office minister) to the position. Downing Street strongly denied this claim.

Sir Laurie Magnus, the newly appointed ethics advisor, has placed Zahawi under additional scrutiny. However, his supporters hope that it will enable them to deflect any immediate calls for his resignation. Minister Zahawi expressed his appreciation for the decision and said that he was confident that he had acted correctly throughout.

Sunak, who promised to lead a government of integrity, professionalism, and accountability at all levels, still faces intense pressure from the growing list of scandals that could affect the Conservative party.

The commissioner for public appointment will investigate Richard Sharp’s selection for the BBC chair. This is amid claims that he helped Boris Johnson obtain a loan up to PS800,000.000 weeks before he was suggested for the job by then prime minister.

Sunak stated that Zahawi’s ethics advisor, who was appointed after a six month vacancy, was asked to “get at the bottom of it all, to investigate the matter thoroughly and establish all facts.” He would then determine the “appropriate next step”.

Although the investigation will focus on Zahawi’s declarations, Downing Street stated that it wasn’t being “prescriptive” regarding the remit. This means it could also include any potential false claims made or legal threats and Zahawi’s time as chancellor.

Anneliese Dodds (Labour party chair) demanded that Sunak be clear that the inquiry would include Zahawi using lawyers to “aggressively attempt to shut down questions about his carelessness’ with taxes.” She stated that Nadhim Zahawi’s investigation should include his use of lawyers to answer these questions.

Zahawi is expected to remain the Conservatives’ chair throughout. This job will require him to oversee the party’s strategy for the coming spring elections.

Since the Guardian reported last Friday that Zahawi had been informed he had to pay a penalty of seven figures to HMRC for his tax affairs, Zahawi has come under increasing pressure to resign. Zahawi did not deny that he was being investigated by HMRC while he was chancellor and was responsible for the country’s finances, including taxation.

Labour is asking Zahawi for details about when the payment was made to HMRC. This dispute resulted from a non-payment capital gains tax following the sale of shares in YouGov (the polling company Zahawi co-founded).

After refusing to answer any questions for months about unpaid taxes Zahawi finally admitted that he had paid HMRC what “was due” after the tax agency “disagreed” about the allocation of shares in YouGov. Zahawi said that the team that reviewed his case determined it to be a “careless and not deliberate” mistake.

Keir Starmer, Labour leader, demanded that Sunak “show some leadership” by sacking the Conservative chair, as he shouldn’t need an ethics advisor to determine if he did wrong.

“This is a test for the prime minister. We were promised integrity and accountability by him. If those words are meaningful, then the prime minister should be fired. Starmer stated that if he does not, it will be more evidence for the British public as to how weak this prime Minister really is.”

Zahawi faces questions about his inability to inform his department about WhatsApp conversations with David Cameron. Cameron contacted Zahawi in 2020 to lobby for Greensill’s now-defunct finance company Greensill.

After being asked by Cameron for assistance, it was revealed that Sharp’s contact information had been provided by the former business minister. After being asked by Cameron for help, he told his department he didn’t have any of these messages. However, it was later revealed that they were deleted.

Zahawi didn’t pass the details on to his department because he “didn’t consider the matter relevant to his ministry work and did not consider passing an individual’s contact information to be official government business.” This week, the information commissioner ruled otherwise.

Jeremy Quin, the Cabinet Office minister, was pressed in the Commons to determine if Zahawi was telling truth. He said that his tax had been “fully paid” and was up-to-date during a television interview.

Stephen Timms, Labour MP, stated to Quin that “we now realize that statement was false”.

Quin responded, “I don’t know the answer. I genuinely don’t.” He also said that he couldn’t say if Zahawi was denied a Knighthood because of these grounds.

Angela Rayner, Labour’s deputy leader, stated: “Is there any system to prevent someone being actively investigated for unpaid taxes being appointed to lead the UK’s fiscal system?” It’s possible that it’s so absurd that no one could have imagined it would happen.

Lord Evans, the chair of the committee to standardize public life, wrote to leaders in the public sector warning that an ethical culture cannot be created by chance. He stated that public confidence is dependent on doing things right and in the public’s best interests.