A Tory MP has said Nadim Zahavi should “stand aside” before an inquiry into his tax affairs.
Former minister Caroline Nokes has called on the Conservative Party chairman to recuse herself until the investigation is complete.
Rishi Sunak has asked his independent ethics consultant to look into Zahavi as the saga surrounding his taxes engulfs the government.
Noakes, chair of the Commons women and equality committee, told Talk TV she welcomed the inquiry.
“I think there are a lot of unanswered questions,” Noakes said.
“The challenge for Nadim is – look at the first pages, he’s leading many of them.
“When you become the story it distracts from anything else the government is trying to do.
“There are countless examples of good, capable cabinet colleagues who have gotten themselves into trouble, who have quickly resigned and in fact come back a few months later.
“To clear this, Nadim should stand aside and let the investigation go on.”
However, Home Office Minister Chris Phillips hit back, saying he did not think Zahavi should step down during the investigation.
Philip told BBC Breakfast: “I think it is fair that where there is an investigation, the person concerned is allowed to continue in service while that investigation continues.
“We have a principle, don’t we, in this country, is innocent until proven guilty. It applies to a whole range of different situations.
“An inquiry has been launched by the Prime Minister, it is the right thing to do. She will get to the bottom of it and then the Prime Minister will take his decision.
“But I don’t think it is appropriate to jump to any conclusions before the investigation is over.”
On Noakes’ call for Zahawi to stand aside, the minister said: “I don’t take that view, I think we should let the investigation go on.”
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 claims began to emerge when Zahavi was made chancellor, with reports that Cabinet Office officials had alerted the then Prime Minister, Boris Johnson, to the HMRC controversy.
Zahavi has admitted he “owed” HMRC after “disagreeing about the exact allocation” of shares in UGov, an error he said was “reckless” not intentional.
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.
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) Rishi Sunak