Nadhim Zahawi ‘furious’ over sacking as allies lash out at tax probe report

Allies say ex-chancellor told Treasury official about HMRC fine – but government insists sacking ‘fair’

Nadhim Zahawi is said to be “furious” about his sacking by Rishi Sunak as Tory party chairman after an ethics probe found serious breaches of the ministerial code over his tax affairs.

The prime minister fired Mr Zahawi on Sunday morning, more than six months after The Independent first revealed details of an HMRC investigation into Mr Zahawi’s tax affairs.

Mr Sunak’s adviser Sir Laurie Magnus found he had broken ministerial rules seven times by failing to be open and honest during the tax saga – including by making “untrue” public statements.

But allies of Mr Zahawi claimed that the MP had lost his job after being given only limited time to make his case, with claims he was only given a 30-minute meeting with Sir Laurie to defend himself.

The ex-chancellor’s allies told The Spectator that he had told Tom Scholar, then permanent secretary at the Treasury, about both the HMRC investigation and the penalty paid.

They also claim his ministerial register of interests was up to date in September, despite Sir Laurie’s report stating that he had failed to update it until this month.

Mr Zahawi is said to be “furious” about his sacking by Mr Sunak, according to The Times, and is considering a formal response to the details set out in the ethics adviser’s report.

“He’s opened himself up to all sorts of problems in the future,” one Zahawi ally told the newspaper of Mr Sunak. “The Boris lot always accused Sunak of not having any loyalty. He’s proved the point. Good luck keeping ministers onside now.”

But No 10 rejected the idea any government officials knew of a penalty in September. “The penalty fact was not set out until a later date. As the [ethics adviser] made clear, [Mr Zahawi] did not declare the details of the fine … until January,” said Mr Sunak’s official spokesman.

Zahawi allies also said he only got a 30-minute hearing from Sir Laurie on Wednesday. But it is understood Mr Zahawi and Sir Laurie had a second conversation on Saturday.

Tory health minister Helen Whately said she thought Mr Sunak had followed a “fair” process when deciding to sack his Tory chairman, and said Mr Zahawi had enjoyed a fair hearing.

“When you’re appointed a minister you get asked a series of questions, you have to fill in your register of interests,” she told Sky News. “Those were opportunities when he could have been transparent and he wasn’t.”

Former Brexit secretary David Davis told Channel 4 that the chances of Mr Zahawi returning to the cabinet were “vanishingly small”, adding that it would be “quite difficult for him” to keep his Stratford-on-Avon seat despite a majority of almost 20,000.

Mr Zahawi did not comment explicitly on the row in his letter to the PM following his sacking. He did not apologise for his handling of his tax affairs and lashed out at the media in his exit letter.

For Mr Sunak, who came to office promising “integrity”, the row continues to raise questions. Labour’s deputy leader Angela Rayner and party chairwoman Anneliese Dodds have written to the PM to ask him what he knew about the investigation into Mr Zahawi’s tax affairs.

Urging the PM to “come clean”, Ms Rayner said that the “hopelessly weak prime minister has been dragged kicking and screaming into doing what he should have done long ago”.

The Liberal Democrats have written to Mr Sunak calling on him to withdraw the Conservative whip from Mr Zahawi, and said he was “unfit to serve the people of Stratford-on-Avon”.

The party also called on the government to clarify whether Mr Zahawi had informed the attorney general before issuing threats of legal action against journalists, and demanded an inquiry into the matter.

Nadhim Zahawi was sacked by the PM on Sunday ((Victoria Jones/PA))

Sir Laurie’s four-page report said the technical details of the HMRC investigation were outside his scope. Among the findings, he notes “omissions” from Mr Zahawi that amount to a “serious failure” to meet the standards of the ministerial code.

By failing to declare the tax issue before Boris Johnson made him chancellor in July 2022, Mr Zahawi had failed to declare interests “which might be thought to give rise to a conflict”, said the report.

Sir Laurie also told the prime minister that Mr Zahawi had “failed to disclose relevant information” on the tax investigation when he was appointed Cabinet Office minister by Liz Truss in September and Conservative Party chair by Mr Sunak in October.

Sir Laurie also accused him of making an “untrue public statement” about the investigation last summer. Mr Zahawi initially dismissed our story as a “smear”, claimed he was “not aware” of the HMRC investigation, and threatened The Independent and others with legal action.

But last Saturday, the minister admitted that HMRC had found he had made an “error” that he claimed was “careless and not deliberate”.

Meanwhile, deputy prime minister Dominic Raab remains under investigation by senior lawyer Adam Tolley KC over bullying complaints. He has denied all allegations.

It comes as former Tory chancellor George Osborne warned that Mr Sunak needed to “do something pretty quickly” to rescue his premiership from the scandals that dogged his predecessor Boris Johnson.

“And at the moment, he is being pulled down by a series of scandals which do not directly involve him, are kind of hangovers, if you like, of the Johnson era,” he told The Andrew Neil Show on Channel 4.