Last weekend, after many months of denials and even threats of legal action, the Conservative Party chair Nadhim Zahawi admitted that he had been in a dispute with the tax authorities which he had recently settled. He said he had made a “careless but not deliberate” error in his taxes.
Whatever else the error was, it was also expensive. Reports, not denied, have suggested that the bill Zahawi settled with HMRC was around £5m, with £1.3m of that comprising a 30% penalty.
Why did he owe so much tax?
More than 20 years ago, Zahawi co-founded the polling giant YouGov. But he didn’t take a personal stake; instead he gave his “founding shares” to a company in Gibraltar, Balshore Investments. We now know that Balshore’s listed owners are Zahawi’s parents, though in his public statement Zahawi only referred to his father.
