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UK Conservative Party chair under pressure over alleged tax avoidance

Nadhim Zahawi, chairman of the British Conservative Party, has been under pressure as the country's premier asked his independent ethics adviser to look into millions of pounds of unpaid taxes.

"Clearly in this case there are questions that need answering," Rishi Sunak told reporters on Monday during a visit to a hospital in Northamptonshire, BBC reported.

Zahawi has been facing calls to resign for some time, after it emerged that he paid a penalty to HM Revenue & Customs (HMRC) over unpaid taxes while he was chancellor last year, as part of a multi-million pound dispute.

"That's why I've asked our independent adviser to get to the bottom of everything, to investigate the matter fully and establish all the facts and provide advice to me on Nadhim Zahawi's compliance with the ministerial code," said Sunak.

He also added that Zahawi would remain Conservative Party chairman during the investigation and had agreed to fully cooperate.

- Offshore family company in Gibraltar

Local reports showed that the tax payment dispute was related to a polling company called YouGov that Zahawi co-established in 2000 before he became a member of parliament.

But, problems have emerged concerning YouGov's share distribution, which allocated 42.5% of its shares to Gibraltar-based trust Balshore Investments, run by his family and registered offshore.

In a statement on Saturday, Zahawi said his father took founder shares in YouGov "in exchange for some capital and his invaluable guidance."

Tax expert Dan Neidle started examining publicly available documents on Zahawi's businesses, claiming that he was trying to bend the rules and avoid paying taxes through Balshore Investments.

Last summer Zahawi was interviewed by Sky News, and said: "There have been claims I benefit from an offshore trust. Again let me be clear, I do not benefit from an offshore trust. Nor does my wife. We don't benefit at all from that."

On Tuesday, Neidle said in a report penned for Tax Policy Associates, a non-profit advisory firm, that Balshore "held the YouGov shares, and we know they were eventually sold for around £27 million (about $33.3 million)."

"In plain English – he benefited from the Balshore structure. In technical tax terms, he was likely a beneficiary of the trust. The existence of the settlement obviously means that, prior to the settlement, Mr Zahawi had failed to pay tax that was due. The fact he admitted to "carelessness" means it was not just a technical error – there was a failure to take reasonable care," it underlined.

Source: Anadolu Agency