Rishi Sunak says questions remain over Nadhim Zahawi tax affairs

Prime Minister Rishi Sunak has asked his independent ethics adviser to look into the tax affairs of Conservative Party chairman Nadhim Zahawi.

Mr Sunak said there were “questions that need answering” over the case.

Mr Zahawi is facing calls to resign, after it emerged he paid a penalty to HMRC over unpaid tax while he was chancellor, as part of a multi-million pound dispute.

He said he was “confident” he had “acted properly throughout”.

On a visit to a hospital in Northamptonshire, Mr Sunak told reporters: “Integrity and accountability is really important to me and clearly in this case there are questions that need answering.

“That’s why I’ve asked our independent adviser to get to the bottom of everything, to investigate the matter fully and establish all the facts and provide advice to me on Nadhim Zahawi’s compliance with the ministerial code.”

He added that Mr Zahawi would remain Tory Party chairman during the investigation and had agreed to “fully cooperate”.

In a statement, Mr Zahawi said he welcomed the investigation and looked forward to “explaining the facts of this issue” to Sir Laurie Magnus, the prime minister’s independent adviser on minister’s interests.

He added: “In order to ensure the independence of this process, you will understand that it would be inappropriate to discuss this issue any further, as I continue my duties as chairman of the Conservative and Unionist Party.”

Allies of Mr Zahawi have told the BBC he is determined to stay on as Tory Party chairman, despite growing pressure over his tax affairs.

On Saturday, Mr Zahawi confirmed he had made a payment to settle a dispute with HM Revenue & Customs (HMRC).

The BBC understands the dispute was resolved between July and September last year, when he was chancellor, and that the total amount paid is in the region of about £5m, including a penalty.

The Guardian had previously reported that Mr Zahawi paid back tax he had owed, as well as a 30% penalty, with the total settlement amounting to £4.8m.

Mr Zahawi has described the error as “careless and not deliberate”.

The tax was related to a shareholding in YouGov, the polling company he co-founded in 2000 before he became an MP.

Mr Zahawi has not confirmed how much his penalty amounted to, nor the total value of the final settlement with HMRC.

Although the BBC has been told the issue was resolved while Mr Zahawi was chancellor – and the minister ultimately responsible for HMRC – it is still not clear when he originally became aware of it.

His allies claim he told the government’s Propriety and Ethics Team – which is in charge of ensuring ethics across government departments – about it before his appointment as chancellor.

After he became chancellor, Mr Zahawi did not seek to challenge HMRC’s demands, but instructed his accountants to pay all of what they said was due, the BBC has been told.