Inland Revenue experts are investigating the tax affairs of new chancellor and Tory leadership hopeful Nadhim Zahawi, The Independent can reveal.
HMRC became involved after secret inquiries were initially launched into Mr Zahawi’s finances by the National Crime Agency in 2020. The Independent has also established that officers from the Serious Fraud Office investigated the Chancellor’s financial affairs.
The probe was then passed to HMRC, which falls under the control of the Treasury that Mr Zahawi now runs. A senior Whitehall source confirmed that the tax investigation is currently “unresolved”.
It can also be revealed that Boris Johnson, home secretary Priti Patel and the Cabinet Office were all informed of the investigations.
The disclosures come as multimillionaire Mr Zahawi announced he was running in the leadership race to succeed Mr Johnson as Prime Minister.
Launching his campaign on Saturday evening, Mr Zahawi pledged to lower taxes for individuals, families and businesses, boost defence spending and continue with education reforms.
The Independent reported on Wednesday that the NCA’s International Corruption Unit had looked into his finances and tax in an inquiry codenamed ‘Operation Catalufa’.
We also described how Mr Zahawi said he knew nothing about it until contacted by The Independent. The investigation was launched in 2020, the year Mr Zahawi rose to political prominence as vaccines minister during the pandemic.
Mr Zahawi denied any wrongdoing and insisted he had always paid all his taxes.
There is no suggestion of any wrongdoing by Mr Zahawi, a popular and respected figure among Tory MPs.
Well-placed sources have now confirmed that HMRC, the NCA and SFO had all been involved in a “detailed investigation” into Mr Zahawi.
It is understood that the HMRC investigation is being conducted by a unit which is responsible for offshore tax issues.
A Cabinet Office spokesman said: “Under the ministerial code, ministers must ensure that no conflict arises, or could reasonably be perceived to arise, between their ministerial position and their private interests, financial or otherwise.”
The spokesman added: “The Chancellor has followed the process set out in the ministerial code and complied with those requirements to the satisfaction of the previous (Whitehall) independent (ethics) advisors.”
Asked which ethics advisors had cleared Mr Zahawi’s appointment bearing in mind that Whitehall ethics advisor Lord Geidt resigned last month after clashing with Mr Johnson and has not been replaced, the spokesman said he believed Mr Zahawi had been cleared by Lord Geidt’s predecessor Sir Alex Allan when Mr Zahawi first became a minister in 2018. That was two years before the investigation into Mr Zahawi’s tax affairs started.
Mr Zahawi declined to comment on the latest revelations.
A Downing Street spokesman said: “The usual pre-appointment declarations were made by the minister and any necessary checks completed.”
Mr Zahawi, who moved to the UK from Iraq as a child, made his fortune with polling company YouGov and in the oil industry, where he served as an executive at Gulf Keystone Petroleum until 2018. He became MP for Stratford-upon-Avon in 2010.
The former education secretary was appointed Chancellor this week following the resignation of Rishi Sunak. Having defended the prime minister, he then called for him to stand down the day after taking up the role, telling Mr Johnson he “must do the right thing and go”.
Mr Zahawi made his fortune with polling company YouGov and in the oil industry
