Forget Sunak's seatbelt, what about Zahawi's taxes?

[noblegiraffe]

Our former Chancellor, it would seem, is only able to say that he has paid his taxes in full, because he realised the gig was up, he'd been caught and went to HMRC to sort it out.

And the reason it hasn't been a bigger story is that the litigious Mr Zahawi hired a firm of lawyers to send off threatening letters to anyone investigating, stating, untruthfully, that these letters had to remain confidential.

Calculations suggest that if he had to pay £3.7 million in back-taxes, this would imply £27 million in undeclared income, representing about a 1/4 of his net worth. This, therefore, is not small change, or a tiny oversight.

The timeline of events is worth reading, here www.taxpolicy.org.uk/2023/01/19/zahawi_story/

Not sure what the fine is for not wearing a seatbelt, but Zahawi had to pay a 30% penalty on his unpaid taxes, meaning that his claims that his taxes were filed and paid correctly is untrue.

He was Chancellor of the Exchequer while this was going on.

No wonder he was so supportive of Boris, going as far as to say teachers should remain impartial when discussing lawbreaking politicians

www.mumsnet.com/talk/_chat/4480290-Teachers-should-remain-impartial-on-matters-of-lawbreaking-by-politicians-says-Zahawi

Of course whether his tax-dodging is illegal depends on whether it counts as tax avoidance or tax evasion. No idea on that front, given how easily the rich seem to get away with this stuff.

a completely unnecessary investigation by an ethics advisor

Actually having an ethics advisor is also a novelty.

But nothing to see, and what about Russia, Qatar, UAE

www.theguardian.com/uk-news/2023/jan/31/uk-global-corruption-index-transparency-international-qatar-russia-brazil

The UK has fallen sharply down the global corruption league table after a report warned of “woeful inadequacies” in upholding political integrity.

Britain fell seven places to 18th on Transparency International’s corruption perceptions index, representing the biggest fall among the G7 countries.

Ooh, Tory minister gets banished to the Back Benches for serious, culpable tax fraud offence when others got prison for similar.

Shows what this country is now I suppose.

I had long suspected that Gove and JRM wanted to return the UK to halycon days or yore. What I hadn't realised was that those halcyon days they were aiming for was when the UK was the sick man of Europe. I am sure they are delighted to have achieved thier aim so quickly. Know doubt @Clavinova will find some whataboutery to demonstrate why it is Tony Blair's fault.

It's quite odd that being investigated by the National Crime Agency isn't in itself seen as a huge red flag that maybe this person isn't fit to be in government.

Maybe the government need to implant some kind of internal "fit and proper person" test

They’re meant to. Zahawi lied on his forms.

Remember that Zahawi was secretary of state for business, energy and industrial strategy during the time he was being investigated. We were in lock down and Cummings and Barnard Castle was in the news.

We know that the nca works with the met where needed, and we know how well the met investigated partygate. Given the tension in the country, I wonder hw much pressure was brought on the nca investigating team. Can you imagine the public response at the time if he'd been found to have committed a serious financial crime at that time. Conspiracy, maybe but its not taking me a huge leap to join the dots. Maybe they should reopen the investigation, or be open with their findings after all, having a minister accused of fiddling his taxes is one thing- having him fined by hmrc for this later looks bad, if the government was bringing pressure to get the right result, that would be atrocious.

Of course, this is just my thinking, I would love for our journalists to do some digging on this.

Zahawi also put himself forward for the July leadership election.

L1ttledrummergirl
We know that the nca works with the met where needed, and we know how well the met investigated partygate Conspiracy, maybe...

We also know that Durham Police failed to fine Dominic Cummings, Labour MP Kevan Jones and Keir Starmer.

Do you believe Zahawi made a mistake?

LookingOldTheseDays
30% is the absolute maximum penalty HMRC will apply for that category of inaccuracy. In almost all cases, penalties are reduced due to mitigations - but in this case it was not.
What that tells us is that NZ did not "tell", "help" or "give access" to HMRC in the course of their enquiry, or make any unprompted disclosures.
Tbh, the level of penalty strongly indicates that HMRC almost certainly viewed the error as "deliberate" rather than "careless" but didn't have quite enough evidence to give him the "deliberate" penalty.

I've just had a look at your HMRC link - you obviously didn't spot this;

The following tables show the standard maximum and the minimum penalties for each type of inaccuracy dependent on the type of disclosure, unprompted or prompted. However, higher maximum and minimum penalties may apply where the inaccuracy involves an offshore matter and the tax at stake is income tax or capital gains tax, see CH1 16000+.

www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch82470

The tax at stake was capital gains tax and the media have reported an offshore trust in Gibraltar.

The penalty ranges relating to offshore matters (if indeed relevant) are different;

www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch116600

Gibraltar appears to be a category 2 territory (see Note: Crown Dependencies and Overseas Territories of the UK are, unless listed, in category 2)

Penalties:
Category 2 Careless Unprompted 0% 45%
Category 2 Careless Prompted 22.5% 45%

Therefore, without further details, I don't see how you do know whether Zahawi paid the maximum penalty in the 'careless' category or not.

DuncinToffee
Do you believe Zahawi made a mistake?

Do I think Zahawi thought he had found a legitimate (and legal) way to avoid paying capital gains tax? Plausible - otherwise he would have faced criminal charges?

I find it beyond hilarious that anyone can defend a Chancellor evading tax. It's not worth engaging with.

Fancy sinking that low.

And if new evidence comes to light, they should be looked at as well.

I find it beyond hilarious that anyone can defend a Chancellor evading tax

I am only here to point out the facts as we know them.

Of course you are......

That's not what I asked but you know that.

Did he get his legal team to send those threatening letters by accident too?

What.... that he didn't evade tax? Funny!

Did he get his legal team to send those threatening letters by accident too?

Perhaps understandable if journalists were still implying he was subject to investigation by the National Crime Agency, when the NCA had already decided to take no action some months before.

@Clavinova Just for the record. Durham police have also failed to fine me. This may be because I haven't done anything worth being fined for on their patch, but please next time you post that whataboutery I'd be grateful if for completeness I was included.

@Clavinova do you think it is acceptable for the Chancellor of the Excequer to try and find ways of evading paying tax?

@Clavinova I am pretty sure your main purpose here is not to provide facts, but whatabouts, that distract from whatever the latest failings of the politicans you so admire are.

I admire your dedication to that task.

L1ttledrummergirl

jgw1 appears to be upset because you mentioned Dominic Cummings and Barnard Castle on a thread about Nadhim Zahawi.

It would have been quite simple and more honest of him to have held a press conference saying "I have been investigated by the NCA and they have now dropped the investigation.".

There are many ways with dealing with the situation he is in, without paying an unscupulous lawyer to send letters.

I think you need to read the timeline of what Zahawi was doing with regard to threatening letters.
www.taxpolicy.org.uk/2023/01/19/zahawi_story/