Nadhim Zahawi committed a serious breach of ministerial code, says Sunak

Nadhim Zahawi has been sacked as Tory Party chairman after an inquiry by the PM’s ethics adviser found he had failed to disclose that HMRC was investigating his tax affairs.

The PM said Sir Laurie Magnus’s inquiry made clear there had been a “serious breach of the ministerial code”.

Rishi Sunak asked for the investigation after reports Mr Zahawi had paid HMRC a penalty over previously unpaid tax.

Sir Laurie said the MP had missed many chances to be open about his tax.

After receiving the findings, Mr Sunak wrote to Mr Zahawi praising his achievements but saying he had decided to remove him from government.

Mr Zahawi thanked the prime minister and said he took pride in his role in the vaccine rollout and the Queen’s funeral – but did not offer an apology or mention his tax affairs.

He promised to support the prime minister “from the backbenches in the coming years”.

In a critical four-page report to the prime minister, Sir Laurie said Mr Zahawi had not only failed to include the HMRC investigation in his register of interests until July 2022, but also failed to update it once a settlement had been reached.

Taken together these “omissions” constituted a “serious failure to meet the standards set out in the ministerial code”, he said.

Sir Laurie was also critical of Mr Zahawi for describing new stories about his tax affairs as “smears” in July 2022 and failing to correct the record until January 2023.

“I consider that this delay in correcting an untrue public statement is inconsistent with the requirement for openness,” he said.

He concluded that Mr Zahawi had shown “insufficient regard for the general principles of the ministerial code and the requirements in particular to be honest, open and an exemplary leader through his own behaviour”.

He praised Mr Zahawi’s “willingness to assist with my inquiry” and said he appreciated the pressures of being a minister.

However, he added: “These factors, however, cannot mitigate my overall judgement that Mr Zahawi’s conduct as a minister has fallen below the high standards that, as prime minister, you rightly expect from those who serve in your government.”

Nadhim Zahawi’s tax affairs have been a headache for the government for the past 10 days.

Rishi Sunak has argued that due process is important. But he’s faced accusations he was weak for not acting earlier to get rid of Mr Zahawi.

The PM got the report from his ethics adviser early this morning. He spoke to Mr Zahawi to tell him he was being sacked, then it was confirmed publicly.

The report from Sir Laurie Magnus left little room for any other conclusion than Mr Zahawi’s departure.

He highlights a number of times Mr Zahawi should have declared more about his tax affairs – and didn’t.

Hence the conclusion that there was a serious failure to follow the ministerial rulebook.

In his letter to Mr Zahawi, Mr Sunak said the MP for Stratford-Upon-Avon could be “extremely proud of your wide-ranging achievements in government over the last five years”.

He specifically cited Mr Zahawi’s work overseeing the Covid vaccine, saying it was “critical to ensuring our country came through this crisis and saved many lives”.

But Labour deputy leader Angela Rayner said Mr Zahawi should have been sacked “long ago” and accused the prime minister of being “hopelessly weak”.

Ms Rayner and Labour Party chair Anneliese Dodds have now written to the prime minister asking him to “come clean” about when he was made aware of the HMRC investigation into Mr Zahawi.

Downing Street has previously insisted that Mr Sunak “was not informed of these details, informally or otherwise”.

The SNP’s Kirsty Blackman echoed Labour’s concerns saying: “Sunak still has questions to answer over this whole affair about what he knew about the settlement and what advice he received about Zahawi’s tax on his appointment.”

Liberal Democrat Deputy Leader Daisy Cooper said Mr Zahawi should “do the right thing” and resign as an MP.

Levelling up Secretary Michael Gove told Sunday with Laura Kuenssberg that it was important the facts were “investigated fully and properly” and the situation had required “cool forensic analysis”.

Asked whether he should ever have been appointed, Mr Gove said his “understanding” was that there was “no information that was brought to the attention of the prime minister, either Rishi or indeed Liz Truss which would have led them to believe at the time it was inappropriate to have Nadhim on the team”.

During his interview, Mr Gove also said he expected Mr Zahawi to “reflect” on how he had told journalists looking into his tax affairs that they were attempting to smear him.

Dan Neidle, the tax lawyer who began investigating Mr Zahawi’s taxes last year, told BBC News the MP had “set lawyers on me… he tried to shut me up”.

“Regardless of what happened with the tax, his behaviour… I feel, was a breach of the ministerial code,” said Mr Neidle, who is a Labour supporter but insists his investigations are non-partisan.

In his letter to Mr Sunak, Mr Zahawi expressed concern about the conduct of journalists in recent weeks, specifically mentioning one headline which said the “noose was tightening”.

April 2021: HMRC starts having interactions with Mr Zahawi, including a meeting with him and his advisers. Mr Zahawi – who was vaccines minister at the time – told Sir Laurie he believed he was “merely being asked certain queries” rather than being investigated. Sir Laurie says Mr Zahawi should have understood this was “a serious matter” and included it in his declaration of interests

15 September 2021: Mr Zahawi is made education secretary by then-Prime Minister Boris Johnson. Sir Laurie says Mr Zahawi again failed to declare his interest

5 July 2022: He is promoted to chancellor. He completes a declaration of interest for his new role but makes no reference to an investigation by HMRC

10 July 2022: Mr Zahawi describes reports he is being investigated by HMRC as “smears”

15 July 2022: He receives a letter from HMRC and subsequently updates his declaration of interests to acknowledge an investigation was under way.

August 2022: Mr Zahawi reaches an agreement with HMRC for failing to take “reasonable care”. The BBC has been told the total amount paid to the taxman was in the region of about £5m

September 2022: A final settlement is agreed with HMRC but Mr Zahawi does not update his declaration of interest form with the new information

September and October 2022: Mr Zahawi becomes a levelling up minister under Liz Truss’s short-lived premiership and Tory Party chair under Rishi Sunak. Again, Mr Zahawi does not update his declaration of interest form

21 January 2023: Mr Zahawi issues a statement acknowledging he reached a settlement with HMRC following an investigation

23 January 2023: The prime minister asks his ethics adviser Sir Laurie to look into the disclosures made about the tax affairs of Mr Zahawi