Zahawi inquiry could conclude quickly amid pressure on Downing Street

The investigation into Nadhim Zahawi may conclude in as little as 10 days, according to some suggestions, as Downing Street continues to face pressure over the Tory chairman’s tax affairs.

Rishi Sunak has ordered an investigation by Sir Laurie Magnus, his independent adviser on ministers’ interests, into whether Mr Zahawi broke ministerial rules over the estimated £4.8 million bill he settled with HM Revenue & Customs (HMRC) while he was chancellor.

The Prime Minister, who is hosting an away day with Cabinet colleagues at Chequers, was grilled on the furore by Labour leader Sir Keir Starmer in the Commons on Wednesday.

Mr Sunak told MPs that while it would have been “politically expedient” to sack Mr Zahawi, “due process” meant that the investigation into his tax affairs should be allowed to reach its conclusion.

Downing Street has not set a timeline or indicated the pace of the inquiry, only saying it hoped Sir Laurie could report back “swiftly”.

One senior minister suggested the result of the investigation could be on Mr Sunak’s desk in as little as 10 days, while The Times reported that the independent adviser is expected to expedite the process and report back within three weeks.

Work and Pensions Secretary Mel Stride was asked on ITV’s Peston programme on Wednesday about rumours suggesting the investigation could be done within 10 days, and said it “wouldn’t be untypical” for Sir Laurie to operate in that timeframe.

He added: “I can’t be drawn on an arrangement of which I don’t know all the details.

“But the good news is that we will – in around, it sounds like, 10 days’ time or thereabouts – hear from the ethics adviser, who will report to the Prime Minister, the Prime Minister will then have the facts and be able to make exactly those judgments.”

Rishi Sunak
Rishi Sunak (Jordan Pettitt/PA)

Mr Sunak acknowledged on Wednesday that he had not been given the full picture about the Tory chairman’s financial matters when he told MPs last week that Mr Zahawi had given a “full” account.

But he insisted that when he entered No 10 and gave Mr Zahawi the job of Minister Without Portfolio “no issues were raised with me”.

Downing Street was unable to say whether Mr Sunak fears further damaging surprises about Mr Zahawi’s tax affairs.

The row centres on a tax bill over the sale of shares in YouGov, the polling firm Mr Zahawi founded, worth an estimated £27 million which were held by Balshore Investments, a company registered offshore in Gibraltar and linked to Mr Zahawi’s family.

Mr Zahawi said HMRC concluded there had been a “careless and not deliberate” error in the way the founders’ shares, which he had allocated to his father, had been treated.

Downing Street subsequently revealed it did not know last week that Mr Zahawi had paid a reported 30% penalty to HMRC.

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