Zahawi sent legal threats to stop tax probe, consultant claims

Sunak orders investigation into Nadhim Zahawi amid tax questions

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Nadhim Zahawi, the former chancellor, has been accused of lying and then responding with legal threats to stop investigations into his tax affairs, the analyst who first exposed the story has claimed. Independent tax expert Dan Neidle told GB News that Mr Zahawi was concurrently threatening to sue him for publicising allegations related to the alleged mishandling of his tax affairs while holding talks with the HMRC about the discrepancies over which Mr Neidle had accused him.

The complainant told the broadcaster he felt “personally” insulted by Mr Zahawi’s counterclaims and said he had been “smeared again and again”.

The report comes as the Prime Minister Rishi Sunak faces continued calls to suspend the former chancellor while he is under investigation by the new Downing Street ethics adviser Sir Laurie Magnus.

Mr Neidle told GB News: “What makes it personal for me is at the same time that he was negotiating with HMRC to fix the default in his tax affairs he was sending lawyers to threaten to sue me and newspapers for reporting it.

“There was a problem in his tax affairs. He was denying there was a problem with his tax affairs. He was saying again and again, ‘I don’t benefit from an offshore structure’ – when it looks like absolutely he did.

“He’s said he was smeared, he said he was smeared again when I started reporting on this, instead of saying, ‘oh, there might be something here. I’m gonna look into it’, which I think a lot of people would have accepted and I certainly would have done.

“Instead of that, he denied it and he sent lawyers to threaten people reporting on it. That to me is the scandal here.”

He added: “I advise some of the world’s largest corporations on taxes of billions and tens of billions of pounds.

“I’ll tell you what none of them did. None of them received £27million, didn’t get advice about it, didn’t report it to HMRC, didn’t pay the tax on it.

“That is not what normal wealthy people, normal large companies do. That is, as I think he’s admitted, careless, that’s why he’s paid what looks like a 30 percent penalty.

“Lots of people get their tax wrong. Lots of people end up in a fight with HMRC as to who’s right, who’s wrong. Normally, that doesn’t end with a 30% penalty.”

He said: “All the information I have, all of my research is public, but I’m delighted to answer any questions they may have, delighted to share this correspondence from his lawyers, most of which I’ve now published anyway, but I didn’t really think we need an investigation.

“We just need Mr Zahawi to answer ‘what happened?’ Why did you fail to pay tax on so large an amount? And why, instead of owning up to it, did you deny it to us, to me, whilst secretly going to HMRC to settle it and pay a penalty?

“I’m not in favour of people MPs and ministers generally publishing their tax affairs. But if the Chancellor of the Exchequer was so careless as to not report £27 million pounds of income or gains, I think that is a matter of public interest.

“And if he then denies there is a problem, denies the benefits from offshore structure when he does and sends legal threats to people and people reporting on it, that seems to be certainly a matter of public interest.”

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Nadhim Zahawi released a statement in full following accusations of tax avoidance.

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.”

The issue stems from an accusation made by Mr Neidle that Mr Zahawi had benefited from potential tax savings of several million pounds when a Gibraltar-based company Balshore, owned by Hareth Zahawi, the former chancellor’s father, sold its shares in YouGov, a polling company founded in 2000 by the politician.

As the shares were held in an offshore trust rather than by Mr Zahawi directly, Mr Neidle suggested, they would not have been eligible for capital gains tax.

It is this figure that was disputed by the HMRC, for which they concluded he must pay a penalty.

On Friday, the Guardian newspaper suggested Mr Zahawi reached a settlement with the exchequer which reflected the fact he should have paid tax on the sale of these shares at the time. has approached Mr Zahawi and CCHQ for comment.

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