Former Conservative Party chairman Jake Berry has called for Nadhim Zahawi to resign amid the furore around his tax affairs.
Speaking on BBC’s Question Time on Thursday, Mr Zahawi’s predecessor said the current chairman should “step aside.”
Mr Berry said it was “unsustainable” for any minister to stay in post while being investigated.
Rishi Sunak has called in his independent ethics adviser to carry out an inquiry into a multi-million-pound settlement he reached with HMRC while he was chancellor last year.
The prime minister has so far resisted calls for Mr Zahawi - who is also a Cabinet Office minister - to be sacked.
Appearing on Question Time last night, Mr Berry - who himself was sacked as Conservative chairman by Mr Sunak when he became prime minister - said: “The view I have put forward consistently in relation to all these sorts of issues is that the government needs to find a mechanism for ministers and MPs who are under investigation in this way to step aside, to clear their name and then to come back into government if that is appropriate.
“I think for Nadhim that would be the right thing to do now… I do think it’s unsustainable for a minister to stay in post while this investigation is going on, including other ministers who are also under investigation.”
His comments echo those of Tory MP Caroline Nokes and Conservative peer Lord Hayward, who have both suggested Mr Zahawi should stand down as party chairman.
James Harra, HMRC’s chief executive, told a cross-party group of MPs on Thursday that “there are no penalties for innocent errors in your tax affairs” – making clear that his organisation did not fine those deemed to have taken “reasonable care”.
“If you take reasonable care but nevertheless make a mistake, whilst you will be liable for the tax and for interest … you would not be liable for a penalty,” Mr Harra told the public accounts select committee.
“But if your error was as a result of carelessness then legislation says a penalty can apply in those circumstances,” he added, stressing that he was not talking about Mr Zahawi’s specific case.
Mr Sunak is said to be “livid” with Nadhim Zahawi as the fallout of the party chairman’s tax affairs continues.
The prime minister has not spoken to his party chairman since he revealed details of his settlement with HM Revenue and Customs at the weekend, it has been reported.
He is said to be frustrated that his colleague initially failed to disclose that he had paid a penalty for tax avoidance as part of an estimated £4.7 million settlement.
