Ex Chancellor Nadhim Zahawi agrees to pay several million in tax after scrutiny of his family’s financial affairs
FORMER Chancellor Nadhim Zahawi has agreed to pay several million in tax after scrutiny of his family’s financial affairs.
Sources said his representatives will stump up the seven-figure sum to settle a dispute with HMRC.
It comes after questions were asked over whether the mega-rich Tory chairman, 55, avoided tax by using an offshore company to hold shares in YouGov — the polling company he co-founded.
His family trust, Gibraltar-registered Balshore Investments, held a stake worth more than £20million but sold up by 2018.
Mr Zahawi has said he was not a beneficiary of the trust but records show money he owed to YouGov was partly repaid from Balshore dividends.
Think-tank Tax Policy has estimated that Balshore’s sale of YouGov shares should have incurred capital gains tax of around £3.7million.
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A spokesman for Mr Zahawi said last summer that his taxes were fully paid and he was not aware of any investigation.
Mr Zahawi, who ran for the Tory leadership last year, said later that he would provide full information to any queries that HMRC had about his tax affairs.
The MP, who gave up a lucrative job as a director with Gulf Keystone Petroleum in 2018, pledged to publish his future tax returns, but critics said the key questions were linked to his past.
A spokesman for Mr Zahawi, who is worth more than £100million, said he had “never had to instruct any lawyers to deal with HMRC on his behalf”.
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They added: “As he has previously stated, his taxes are properly declared and paid in the UK.”
HMRC said: “We cannot comment on identifiable taxpayers.”
Mr Zahawi today released a statement to "address some of the confusion about my finances".
He said: "As a senior politician I know that scrutiny and propriety are important parts of public life. Twenty-two years ago I co-founded a company called YouGov. I'm incredibly proud of what we achieved. It is an amazing business that has employed thousands of people and provides a world-beating service.
"When we set it up, I didn't have the money or the expertise to go it alone. So I asked my father to help. In the process, he took founder shares in the business in exchange for some capital and his invaluable guidance. Twenty one years later, when I was being appointed chancellor of the exchequer, questions were being raised about my tax affairs. I discussed this with the Cabinet Office at the time.
"Following discussions with HMRC, they agreed that my father was entitled to founder shares in YouGov, though they disagreed about the exact allocation. They concluded that this was a 'careless and not deliberate' error.
"So that I could focus on my life as a public servant, I chose to settle the matter and pay what they said was due, which was the right thing to do.
"Additionally, HMRC agreed with my accountants that I have never set up an offshore structure, including Balshore Investments, and that I am not the beneficiary of Balshore Investments.
"This matter was resolved prior to my appointments as chancellor of the duchy of Lancaster and subsequently chairman of the party I love so much. When I was appointed by the Prime Minister, all my tax affairs were up to date."