Nadhim Zahawi has admitted for the first time he paid nearly £5m to the tax authority to settle his tax affairs, having previously denied the figure involved and claimed he was being “smeared” by journalists who revealed the issue.
The former chancellor told the BBC he had paid HMRC just under £5m after making what he called a “careless mistake” with the tax he paid on the sales of shares in YouGov, the polling company he helped found.
It is the first time Zahawi has spoken openly about the issue, which ended up costing him his job as Conservative chair last year after an inquiry by the prime minister’s ethics adviser. He announced this week he was standing down as an MP at the next election.
Speaking to the BBC’s Sunday with Laura Kuenssberg, Zahawi said: “I’m sorry that when I had my settlement with HMRC two years ago, I should have probably been more explicit in the details, in the ministerial declaration, as to how the settlement was arrived at, and that’s my own mistake.”
He added: “HMRC found that it was not deliberate, that there was a careless mistake … They thought the apportionment of shares in YouGov when it was first launched – I should have had more of the shares on in my name. As it’s been reported, the total payments [were] just shy of £5m.”
Allegations about Zahawi’s tax affairs began to emerge in 2022 as he ran unsuccessfully for the Tory leadership.
Reports at the time revealed that he was under investigation for non-payment of capital gains tax after the sale of £26m of shares in YouGov in 2018.
The shares were sold by Balshore Investments, an offshore fund which YouGov described as “a family trust of Nadhim Zahawi”, with the revenue transferred to an unknown recipient. That year, Zahawi and Zahawi, the UK property company controlled by Zahawi and his wife, received unsecured loans of £26m from an undisclosed source.
In a statement released in 2022, Zahawi called reports that he was under investigation for non-payment of taxes “smears”.
In 2023 the Guardian revealed he had accepted a £5m settlement with HMRC to bring an end to the issue, including a fine likely to be more than £1m. His spokesperson at the time said: “Nadhim Zahawi does not recognise this amount.”
Zahawi defended his previous statements on Sunday, insisting that he was intending to rebut only claims that he was under investigation by the National Crime Agency and Serious Fraud Office, rather than every detail in the stories.
“I said [that] because it was linked to National Crime Agency and SFO, which I’ve never had an investigation from … Maybe I should have been much clearer in my declarations as a minister, but I was under investigation by HMRC and I reached a settlement with HMRC.”
Zahawi announced last week he would not seek re-election as MP for Stratford-on-Avon, saying: “I have come to feel that the time is right for a new, energetic Conservative to fight for the honour of representing Stratford-on-Avon.”
Zahawi won the seat with a 20,000 majority in 2019, but it has been targeted heavily by the Liberal Democrats in the runup to this year’s election.
