Senior Tories up pressure for Nadhim Zahawi to quit over ‘careless’ tax affairs

Nadhim Zahawi was on Wednesday facing fresh calls to resign as the storm over his tax affairs grew.

The Tory party chairman is coming under mounting pressure to quit after Prime Minister Rishi Sunak asked his ethics adviser Sir Laurie Magnus to investigate the row.

The move came after Mr Zahawi, who served as chancellor, admitted at the weekend that he had settled an alleged tax dispute with HM Revenue and Customs connected to shares in the polling company YouGov, which he co-founded.

Although Mr Zahawi has insisted that any error over his tax affairs was “careless and not deliberate”, David Gauke, the former justice secretary and treasury minister, became the latest senior Conservative figure to call for Mr Zahawi to go. He told BBC Radio 4’s Today that if he was the Prime Minister he would be “very tempted” to encourage him to stand down.

“Although Nadhim is a very popular figure with Conservative MPs, he is very well regarded as an effective minister and now chairman of the Conservative Party, it’s hard to see how this doesn’t ultimately end in his resignation.

“There are just too many impossible questions for him. And the longer this drags on, the more difficult it is for the Prime Minister, the more difficult it is for the Conservative Party, the more difficult it is for Nadhim Zahawi.”

Last night, the former attorney general Dominic Grieve told Newsnight: “If I were Prime Minister I would call Nadhim Zahawi in and I would say to him please explain exactly what’s happened. Because it doesn’t need an investigation. And unless Nadhim Zahawi can make out the case that in this matter there’s been some unfortunate mistake which leave him entirely blameless, it seems to me that following proper practice he ought to be resigning.”

But a Tory source insisted on Wednesday morning: “He is not resigning.”

Just last Wednesday Mr Sunak told MPs at Prime Minister’s Questions that Mr Zahawi had addressed the matter in full.

But the Prime Minister appears to have been unaware that Mr Zahawi had allegedly been given a penalty in reaching the settlement with HMRC.

Announcing the investigation by his ethics adviser earlier this week, Mr Sunak admitted there are “questions that need answering”. The BBC said on Monday that Mr Zahawi did pay a penalty to HMRC as part of the deal, reported by the Guardian to be about 30 per cent, taking the total estimated settlement to around £4.8 million, though the figures have not been confirmed.

Mr Zahawi has said he is “confident” he has “acted properly throughout”.

Labour has argued Mr Sunak should sack the Tory chairman before the investigation’s conclusion, describing it as a “pathetic attempt to pass the buck”.