tory party Leader Nadhim Zahawi must be sacked from Rishi Sunak’s top team, Labor has said after he reportedly paid a multimillion-pound tax settlement penalty.
The former Chancellor, attending Mr Sunak’s cabinet, has been under pressure since it was reported he paid HM Revenue & Customs a seven-figure sum to end a dispute.
Deputy Prime Minister Dominic Raab defended his colleague, telling Latest Page News that “all his taxes have been paid”.
“Well, I don’t know the full details of his personal tax affairs, but what I do know from what he said is that he paid all of his taxes,” he said.
“He has no outstanding tax debts and I think that’s what people want to know.”
Dominic Raab defends Nadhim Zahawi as critics demand an explanation
But Labour’s shadow chancellor Rachel Reeves said after a speech to the Fabian Society that the Prime Minister should sack Mr Zahawi as leader of the Tory party.
She also targeted Mr Raab, who previously declined to comment on the status of the bullying investigation against him amid eight formal allegations.
“Dominic Raab, who is under investigation for bullying, gives his verdict on Nadhim Zahawi, who has just been fined £1million for not paying his taxes on time. That pretty much embodies this conservative cabinet,” she said.
“A few months ago he was Chancellor of the Exchequer, you can forget it because it was four last year, but he was Chancellor of the Exchequer and responsible for Britain’s tax affairs and tax collection and we now find that he wasn’t too keen on paying himself.
“So if the Prime Minister wants to uphold his commitment to integrity, honesty and professionalism, he should do the right thing and sack Nadhim Zahawi.”
‘He said he would lead a government that values honesty, integrity and professionalism’: Rachel Reeves insists Rishi Sunak should sack Nadhim Zahawi
Labor also demanded an explanation after The Guardian reported that Mr Zahawi had paid a 30% penalty, bringing the estimated total tax bill to more than £4.8million.
Mr Zahawi’s team have been contacted for comment on the latest allegation.
In a tweet, Labor Deputy Leader Angela Rayner reiterated calls for Mr Zahawi to resign, describing his position as “unsustainable”.
“Nadhim Zahawi’s story about his tax affairs doesn’t add up. After months of denials, the truth is coming out,” she said.
“His position is untenable. Rishi Sunak must dismiss him from his cabinet.”
Mr Zahawi is said to have evaded taxes by using a Gibraltar-registered offshore company to hold shares in voting company YouGov, which he co-founded.
YouGov’s 2009 annual report showed a stake of more than 10% by Gibraltar-registered Balshore Investments.
The report described the company as “the family trust of Nadhim Zahawi,” then executive director of the election office.
Tax lawyer Dan Neidle has estimated that Mr Zahawi owes £3.7million and said that with interest due on top of the reported 30% penalty, the total could be in excess of £4.8million.
Mr Neidle of think tank Tax Policy Associates said: “You don’t pay a 30% penalty if your tax affairs are in order. At best, you do that if you have negligently not paid due taxes.”
The government website says there is a penalty of up to 30% if it arises from a lack of reasonable care. A willful error can be punished with a penalty between 20% and 70%.
A spokesman for Mr Zahawi previously said his taxes were “duly declared and paid in the UK” and that the minister had “never had to hire lawyers to deal with HMRC on his behalf”.
Mr Sunak has defended him, telling the Prime Minister’s Questions on Wednesday that Mr Zahawi “has already fully addressed this matter and I have nothing more to add”.
Questions about Mr Zahawi’s tax affairs have contributed to a series of challenges this week for the Prime Minister, who was fined by police for not wearing a seat belt in the back seat of a moving car.
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