𝐂𝐨𝐧𝐬𝐞𝐫𝐯𝐚𝐭𝐢𝐯𝐞 𝐏𝐚𝐫𝐭𝐲 𝐂𝐡𝐚𝐢𝐫𝐦𝐚𝐧: 𝐍𝐨 𝐩𝐞𝐧𝐚𝐥𝐭𝐢𝐞𝐬 𝐠𝐢𝐯𝐞𝐧 𝐟𝐨𝐫 ‘𝐢𝐧𝐧𝐨𝐜𝐞𝐧𝐭 𝐭𝐚𝐱 𝐞𝐫𝐫𝐨𝐫’ 𝐬𝐚𝐲𝐬 𝐇𝐌𝐑𝐂?
Nadhim Zahawi has not made an “innocent error” in his tax affairs, the head of HM Revenue and Customs suggested, raising fresh questions about the cabinet minister’s £1m fine.
The Tory chair claimed he had “acted properly” with his tax affairs and that officials had judged his error to have been “careless and not deliberate”.
“If you take reasonable care but nevertheless make a mistake, whilst you will be liable for the tax and for interest … you would not be liable for a penalty,” Mr Harra told the public accounts select committee on Thursday.
“But if your error was as a result of carelessness then legislation says a penalty can apply in those circumstances,” he added, stressing that he was not talking about Mr Zahawi’s specific case.
Labour’s deputy leader Angela Rayner said: “Nadhim Zahawi’s excuses are continuing to unravel.”
The prime minister is said to be “livid” at Mr Zahawi over the controversy, and a growing number of Tory MPs and peers are keen for Mr Zahawi to resign now – rather than wait for the outcome of the No 10 ethics investigation.
Saying his position was “untenable” without a clear explanation, Mr Mills added: “HMRC thought he did something they really didn’t like. Penalties are serious, though there are degrees of seriousness. It comes down to him to explain it and clarify all this.”
Ex-Tory chancellor Philip Hammond also criticised Mr Zahawi, saying he would not have accepted the job of chancellor in the summer if he had been involved in a “live” HMRC investigation – first revealed by The Independent in July.
He told LBC: “I think somebody needs to take Rishi Sunak to one side and say, look, you’re trying to protect him, we sort of understand that. But be in no doubt that you are taking on a huge amount of damage with every minute that you keep him in that post.”
Mr Zahawi has given HMRC his approval to speak to the investigation into his tax affairs, a source close to the Tory chair later said.
Trade minister Andrew Bowie – a close Sunak ally – had told the BBC that if Mr Zahawi is found to have “fallen foul” by the ethics adviser, the PM will “of course sack him”. A No 10 spokesperson said on Thursday that Mr Bowie had been “giving his opinion” rather than speaking for the PM.
Asked about the HMRC chief’s remarks, Mr Sunak said he would “await the findings” of the ethics probe.
Speaking at Chequers where he has been holding a cabinet awayday – where he was joined by the Mr Zahawi – Mr Sunak again insisted that the senior Tory’s tax affairs were not raised with him when he appointed him in October.
However, one source told The Guardian that No 10 was informed of Mr Zahawi’s penalty and tax settlement with HMRC prior to his appointment as Tory chair. Downing Street denied that this was the case.
