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Nadim Zahavi had ‘no outstanding’ tax issues when Sunak appointed him, minister insists

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Nadim Zahavi had “no outstanding” tax issues when Rishi Sunak appointed him, a minister has insisted.

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Home Office Minister Chris Phillips said there were no “taxation issues” when Zahavi was named Conservative Party chairman in the autumn.

Zahavi is facing calls to quit after it emerged he settled a multimillion-pound tax dispute with HMRC by paying a fine while serving as chancellor.

The MP for Stratford-upon-Avon was made chancellor by Boris Johnson during the chaos of the former PM’s caretaker government.

Sunak has now asked his independent ethics consultant to look into Zahawi, as the saga engulfs the government.

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Tory MP Phillip said: “As far as I know, the point at which Nadim Zahawi was appointed to his current post by the current prime minister was the back-and-forth about the prime minister earlier in the summer.” I didn’t know.

“And he was told that at that time there were no outstanding issues – taxation issues – applicable.

Former chancellor and current Tory chairman Nadim Zahawi.

Victoria Jones – PA Images via Getty Images

“Obviously after that, especially over the weekend that just went by, a lot of questions have come up, come out publicly.

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“And it is in response to them that the Prime Minister has quite rightly announced this independent inquiry.”

The claims began to emerge when Zahavi was made Chancellor, with reports that Cabinet Office officials alerted then Prime Minister Johnson to the HMRC controversy.

Zahavi has now admitted paying what HMRC said was “due” after “disagreeing about the exact allocation” of shares in YouGov, an error he said was not “negligent” willful.

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Nadim Zahavi’s interpretation of taxes

The allegations are linked to Zahavi’s Gibraltar-based trust Balshore Investments Ltd – in which his father Hareth is a director.

When YouGov was co-founded by Zahawi, the trust was allotted shares equal to the number given to his co-founder Stephen Shakespeare.

When asked about this last year, the then-Chancellor said that neither he nor his wife had made any profit from the trust and denied that it had been used to avoid tax, saying that his father “Living Abroad”.

The stake in the company owned by Balshore was eventually sold by 2018 for around £27 million.

Experts say that if Zahavi has benefited from that transaction, he should pay tax on it.

They point to a 2005 document that suggests that when Balshore at least partially covered the debt, he benefited from the trust.

It has since emerged that Zahavi paid the fine to HMRC while he was chancellor.

Zahavi has not disclosed the size of the settlement – ​​reported to be an estimated £4.8 million including a 30% penalty – or confirm whether it has paid the fine.

Zahavi released a statement to “clear up some confusion about my finances”.

He said: “Following discussions with HMRC, they agreed that my father was entitled to founder shares in YouGov, although they disagreed about the exact allocation. They concluded it was a ‘negligent and not intentional’ error.

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

(Tags to translate) Boris Johnson

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