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Conservative MP: Zahawi told me ‘he hasn’t done anything wrong’ over tax affairs

Under-fire Nadhim Zahawi is telling colleagues “he hasn’t done anything wrong”, as the pressure builds on the Conservative party chair.

This follows reports that Mr Zahawi reached a settlement over a tax dispute with HMRC during his time as chancellor. The exact size of the settlement has not been disclosed, but it is reported to be an estimated £4.8m including a 30% penalty.

Speaking to TalkTV on Tuesday evening, Conservative MP Bim Afolami disclosed a conversation Mr Zahawi had had with a number of colleagues in which the party chair affirmed that “he hasn’t done anything wrong”.

Mr Afolami said he had “spent quite a long time talking to” Mr Zahawi in the House of Commons during votes yesterday, with the party chair “making the point, not just me but to many other colleagues as well, that actually he hasn’t done anything wrong”.

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Defence Mr Zahawi’s actions, Mr Afolami added: “It is typical when people sell businesses that themselves and their accountant make a judgement as to what happens, how much tax they owe, they pay that tax and HMRC are of course within their rights to challenge that and then sometimes there is a discussion and then in the end it is decided.

“He has paid what he was due to pay, he hasn’t challenged their eventual determination and he will now have the opportunity with the independent ministerial adviser on ethics to put his case forward and actually that is an important opportunity”.

However, the tide appears turning against Mr Afolami’s party chair as several colleagues put their heads above the parapet to directly or indirectly challenge Mr Zahawi’s position. These include Conservative MP Caroline Nokes, David Cameron’s former spin doctor Craig Oliver and former Conservative party leader William Hague, who said it was right to have an ethics investigation but that the matter should be dealt with “very quickly”.

Conservative peer Lord Hayward is another senior party figure who has called for Mr Zahawi to stand aside. 

He said: “We don’t know what the timescales are for the inquiry, and I think that’s key. I think he should be considering whether he stands aside for the period of the inquiry. But the significant thing was the other day it was said that additional information had come out. It’s not absolutely clear what that reference to is.”

He added that the issues Mr Sunak is facing at the moment, including Mr Zahawi’s tax affairs, are working in tandem with the ongoing strikes to “flatline” the Conservative Party’s popularity.

Ex-cabinet minister David Gauke, who stepped down as an MP in 2019, has also said that prime minister Rishi Sunak should “encourage” Mr Zahawi to quit before what will be a “very uncomfortable” PMQs at noon.

The prime minister has notably looked to distance himself from his party chair as this scandal had rolled on. On Tuesday, Sunak’s press spokesman refused to say he was confident Zahawi has always told him the truth about his tax affairs.

And, according to a report in The Times,  police minister Chris Philp, who was charged with a difficult media round on Tuesday morning, had been authorised by No 10 to tell broadcasters that Sunak had no idea when he appointed Zahawi that he had been made to pay a penalty for unpaid tax to HMRC. 

Sunak now faces Sir Keir Starmer at prime minister’s questions at noon today, with the Financial Times hearing that the Labour leader will use the opportunity to try to establish what exactly the prime minister knew and when.

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