Investigation criticises Zahawi for claiming Independent’s tax revelations were a ‘smear’

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Rishi Sunak has dramatically sacked Nadhim Zahawi after an investigation accused him of making “untrue” public statements about revelations by The Independent into his tax affairs.

The probe, by the prime minister’s ethic adviser, also found "omissions" by Mr Zahawi, who attended cabinet, fell short of the standards set out in the ministerial code.

Last July Mr Zahawi claimed it was a smear that he was being investigated by the taxman, as first revealed by this newspaper.

At the time he said that “smears have falsely claimed that the Serious Fraud Office, the National Crime Agency, and HMRC are looking into me. Let me be absolutely clear. I am not aware of this. I have not been told that this is the case.”

But Sir Laurie Magnus accused him of making an “untrue public statement” and criticised Mr Zahawi for not correcting it until earlier this month.

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He wrote to the prime minister: “Mr Zahawi has told me that at the time of this statement, he was under the impression that he was answering HMRC’s queries, but that he was not under investigation… I consider that an individual subject to the HMRC process faced by Mr Zahawi should have understood that they were under investigation by HMRC and that this was a serious matter.”

He added that under the ministerial code, ministers have a duty to “be as open as possible with Parliament and the public”.

He added: “Whilst this duty clearly does not extend to disclosing personal tax information, it does include a general duty to be accurate in statements to ensure a false impression is not given or maintained.”

He added that the delay was “inconsistent with the requirement for openness.”

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In his letter, setting out his findings, Sir Laurie Magnus also told Mr Sunak that certain "omissions" by Nadhim Zahawi fell short of the standards set out in the ministerial code.

He said: "Given the nature of the investigation by HMRC, which started prior to his appointment as Secretary of State for Education on 15th September, 2021, I consider that by failing to declare HMRC's ongoing investigation before July 2022 – despite the ministerial declaration of interests form including specific prompts on tax affairs and HMRC investigations and disputes – Mr Zahawi failed to meet the requirement to declare any interests which might be thought to give rise to a conflict."

He also told the PM: "I also conclude that, in the appointments process for the governments formed in September 2022 and October 2022, Mr Zahawi failed to disclose relevant information – in this case the nature of the investigation and its outcome in a penalty – at the time of his appointment, including to Cabinet Office officials who support that process.

"Without knowledge of that information, the Cabinet Office was not in a position to inform the appointing Prime Minister.

"Taken together, I consider that these omissions constitute a serious failure to meet the standards set out in the ministerial code."

"I consider that Mr Zahawi, in holding the high privilege of being a Minister of the Crown, has shown insufficient regard for the General Principles of the Ministerial Code and the requirements in particular, under the seven Principles of Public Life, to be honest, open and an exemplary leader through his own behaviour," he concluded.

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