Under-fire Tory Chairman Nadhim Zahawi has admitted to a 'careless' error as he broke his silence on the row over a multimillion-pound tax settlement.
The former chancellor, who attends Rishi Sunak's Cabinet, has been under pressure since it was reported that he paid HM Revenue & Customs a seven-figure sum to end a dispute.
Even deputy Prime Minister Dominic Raab wouldn't say whether Mr Zahawi would still have his job in a month.
Asked by Sky News if Mr Zahawi will still be in his post in a month, Mr Raab said: "A month's a long time in politics. I certainly hope so."
Mr Zahawi this morning 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."
Deputy Prime Minister Dominic Raab defended his colleague, saying Mr Zahawi "has been very clear that he's paid all the tax that he's owed" and "if there's further questions... I'm sure there'll be the proper transparency".
Labour called for an explanation after The Guardian reported that Mr Zahawi paid a 30% penalty, taking the estimated total tax bill to more than £4.8 million.
Mr Zahawi's team has been contacted for comment on the latest allegation.
Labour's shadow chancellor Rachel Reeves said: "A few months ago ... he was chancellor of the Exchequer and responsible for Britain's tax affairs and tax collection, and we now find that he wasn't so keen to pay himself.
"So if the Prime Minister wants to stick by his commitment for integrity, honesty and professionalism, he should do the right thing and sack Nadhim Zahawi."
Labour deputy leader Angela Rayner told BBC Breakfast: "The fact that Nadhim hasn't been out on the airwaves explaining himself, to me, adds insult to injury, especially given that he called this smears at the time and sent legal letters to those that asked questions legitimately about it.
"If he's lied and misled the public and HMRC regarding his tax affairs then I think his position is untenable."
Mr Raab told Sky News: "I can't speak for the personal tax affairs of a colleague, but what I would say is that Nadhim has been very clear that he's paid all the tax that he's owed, that he's paid it on time, that there's nothing outstanding due, and I think that's of course right and proper.
"If there's further questions, of course, I'm sure there'll be the proper transparency."
Mr Reeves told the Fabians Society Conference: "Dominic Raab, who's being investigated for bullying, is passing judgment on Nadhim Zahawi, who's just had a £1 million fine for not paying his taxes on time. That pretty much epitomises this Conservative Cabinet."
It had been claimed that Mr Zahawi avoided tax by using an offshore company registered in Gibraltar to hold shares in the polling company he co-founded, YouGov - something Mr Zahawi denies.
YouGov's 2009 annual report showed a more than 10% shareholding by Gibraltar-registered Balshore Investments.
The report described the company as the "family trust of Nadhim Zahawi", then an executive director of the polling firm.
Tax lawyer Dan Neidle has estimated that Mr Zahawi owed £3.7 million, and said that with interest that could be due on top of the reported 30% penalty, the total could be more than £4.8 million.
Mr Neidle, of the Tax Policy Associates think tank, said: "You don't pay a 30% penalty if your tax affairs are in order.
"You do it, at best, if you've been careless if you haven't paid tax that's due."
The Government website says a penalty of up to 30% is due if it arises because of a lack of reasonable care. A deliberate error can incur a penalty of between 20% and 70%.
A spokesman for Mr Zahawi previously said his taxes were "properly declared and paid in the UK" and the minister had "never had to instruct any lawyers to deal with HMRC on his behalf".
Mr Sunak has defended him, telling Prime Minister's Questions on Wednesday that Mr Zahawi "has already addressed this matter in full and there's nothing more that I can add".
Questions about Mr Zahawi's tax affairs have added to a series of challenges this week for the Prime Minister, who was fined by police for not wearing a seatbelt in the back of a moving car.
