Nadhim Zahawi’s £5million mistake

Nadhim Zahawi has been fired from the cabinet after a tax scandal that happened half a year ago.

What exactly happened and what’s next for him?

Zahawi was the chancellor of the exchequer. The no 2 men in government. The man whose job was to manage the finances of the country. To decide how government money is borrowed, collected, and spent. So why didn’t he pay his own taxes?

It’s July 2022, and Boris Johnson is on his last legs as prime minister. His house of cards is falling and his cabinet is abandoning him one by one. After Rishi Sunak resigns, Johnson promotes Zahawi to the new chancellor on the 5th of July.

The next day the cabinet had a meeting to discuss the prime minister’s resignation. While this is happening the independent publish an article detailing an HMRC investigation into Zahawi’s tax affairs.

The morning after, he calls for Johnson’s resignation.

The day after that, we’re at July 8th now, he threatens the Independent with legal action which leads to them completely disregarding this and making the HMRC’s investigation into his tax affairs public the next day.

2 days later Zahawi is on sky news and says the following: “I was clearly being smeared. I was told that the Serious Fraud Office, and the National Crime Agency, HMRC, were looking into me. I’m not aware of this. I’ve always declared my taxes – I’ve paid my taxes in the UK.”

It hasn’t been a week in the office and the chancellor is found to have owed millions in taxes. His withdrawal from an offshore bank account was not declared.

Maybe he was “careless and not deliberate” in not telling the truth.

While this was going on, Nadhim Zahawi was a man under investigation by the HMRC. He is a man who has had to pay an extra £1.1 million in tax returns after failing to submit a £3.7 million he received from the sale of his YouGov shares.

Well, it’s not exactly that simple. What had happened was… his shares were held by an offshore company registered in Gibraltar under his family name. After the shares were sold the money was transferred to Zahawi’s personal account.

What he said the HMRC saw as a “careless and not deliberate” mistake ended up costing him £4.8 million.

Jim Harra, HMRC’s chief executive, told MPs on the Public Accounts Committee last week that “there are no penalties for innocent errors in your tax affairs.”

On the 29th of January 2023 Zahawi was fired as Minister without Portfolio, he’s been the MP for Stratford-on-Avon since May 2010. Fellow MPs and constituents are calling for his resignation.

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