Nadhim Zahawi, the new UK chancellor, is under pressure to explain his finances after it was reported that HM Revenue & Customs is conducting an investigation into its tax matters.
HMRC is allegedly investigating Zahawi after receiving information from the National Crime Agency, which examined the deputy’s finances in 2020 but did not take any action, according to a report in the Independent newspaper.
The news of the HMRC investigation, which has not been denied by the tax authority, is uncomfortable because the organization is under the auspices of the Treasury, which now runs Zahawi. The ANC has not ruled on the allegations.
The tax revelation also contradicts the HMRC’s insistence in June, when Zahawi was secretary of education, that there was no investigation into any government minister.
The Financial Times received a freedom of information response from the HMRC on June 15 saying that between one and five ministers were being investigated by tax authorities.
But on June 23 an HMRC spokesman said this had been a mistake and was “wrong”. “We currently have no tax consultations with government ministers,” the spokesman said.
Rachel Hopkins, the shadow Cabinet Office minister, urged the HMRC to “urgently clarify” how many Conservative ministers are under investigation.
“This apparent cover-up will shake public confidence and scrutiny of ministers’ financial relations, ”he said.
“The government said the tax affairs of five ministers were being investigated, then they said no, but now we know the chancellor is under active investigation… The public has a right to know the truth about this whole murky business.” .
On Sunday, an HMRC official admitted that a minister is being investigated.
An HMRC spokesman said: “We found that the information we had previously provided was based on an incomplete review of the department’s records. Only human error.”
Zahawi, who has previously been linked to a Gibraltar-based company called Balshore Investments, has denied any wrongdoing and said he would cooperate with any investigation.
“There has been news in recent days that is inaccurate, unfair and clearly defamatory,” Zahawi said in a statement. “These defamations have falsely claimed that the Office of Serious Fraud, the National Crime Agency and HMRC are investigating me. I am not aware of it. I have not been told that this is the case.”
He added that he had never been domiciled for tax purposes in the UK and said that if he became Prime Minister he would publish annual tax returns. “If there are any questions, of course, I will answer any questions HMRC has about me,” he added.
Zahawi made a fortune as co-founder and CEO of YouGov, a polling company, and is estimated to have a fortune close to £ 100 million.
Balshore Investments has previously been described in YouGov’s annual reports as “the family trust of Nadhim Zahawi’s family”. The company had a stake in the company worth more than £ 20 million, but had sold it in 2017-18. It is wholly owned by T&T Nominees Ltd, registered in Gibraltar, which manages customer trusts.
Zahawi said he has never had an interest in Balshore Investments and that neither he nor his wife nor their children are beneficiaries. Instead, a spokesman said his father, Hareth Zahawi, owned Balshore, adding: “For information, his father does not live in the UK.”
Balshore is not included in Zahawi’s entry in the members ’register of interests or in the ministers’ register of interests because it is owned by his father.
Dan Neidle, head of the Tax Policy Associates think tank, has estimated that YouGov shares that Balshore was worth about £ 24 million. Neidle, former head of tax at the law firm Clifford Chance, urged the chancellor to clarify the detailed details of his tax matters.
Richard Murphy, a professor of accounting practice at the University of Sheffield, said: “It should be revealed who the beneficiaries of this trust are, whether money has been distributed and what taxes have been paid.”