'Questions need answering': Rishi Sunak orders investigation into Nadhim Zahawi's tax bill

ITV News Deputy Political Editor Anushka Asthana reports on the latest from Whitehall as Nadhim Zahawi faces further scrutiny over his tax affairs

Rishi Sunak has ordered an investigation into Nadhim Zahawi amid growing questions over a multi-million-pound tax bill he paid while he was chancellor.

The prime minister has asked new ethics adviser Sir Laurie Magnus to assess whether the former chancellor breached the ministerial code with the HMRC settlement because "clearly in this case there are questions that need answering."Mr Sunak said the Tory Party chairman, who is defying Labour demands for his resignation, would stay on during the inquiry.During a visit to a Northampton hospital, Mr Sunak told ITV News: "Integrity and accountability is really important to me and clearly in this case there are questions that need answering and I want to do that professionally.

Prime Minister Rishi Sunak told ITV News Health Editor Emily Morgan why he had asked for an investigation into Nadhim Zahawi's tax affairs

"That’s why I’ve asked our independent adviser to conduct a full investigation to establish the facts, get to the bottom of things and provide advice to me on Nadhim Zahawi’s compliance with the ministerial code.

"I’m pleased that Nadhim Zahawi has agreed with that approach and will comply fully with the investigation."

Mr Zahawi responded to the news of the investigation by saying "I am confident I acted properly throughout” as he welcomed the investigation.

Mr Zahawi's tax bill was reportedly estimated to be in the millions of pounds and he has not denied the suggestion that around £1m of the total was a penalty fee.

Mr Sunak entered office promising to bring "integrity" to the role after Boris Johnson's time in government was marked by repeated scandals.

The prime minister is facing growing calls to sack Mr Zahawi. Credit: PA

Labour deputy leader Angela Rayner earlier told MPs: “We may have a carousel of ministers but it’s the same old excuses every single time."

Speaking in the House of Commons she said: "Why was it kept secret? Is there no system in place to prevent a person being actively investigated for unpaid tax being appointed to run the UK’s tax system? Maybe it’s that absurd that no-one would ever think it would happen."

Cabinet Office minister Jeremy Quin, responding to criticism, told MPs: "If there are issues to be raised in respect of historic activities, as was suggested by this weekend’s press, that is a matter for the independent adviser to look at and his findings, the summary of his findings, will be published in due course."

To laughter from opposition MPs, Mr Quin added: "Integrity, accountability are critical, as is professionalism, and this government will wait and hear the facts before taking decisions based upon on those facts."

He top MPs that an “updated list of financial interests published”.

Mr Johnson will appear in front of the committee for a four-hour interrogation on Wednesday Credit: PA

Mr Zahawi has insisted his "error" over shares in the YouGov polling company he co-founded was "careless and not deliberate".

It has come to light that Mr Zahawi resolved the tax dispute between July and September when he was chancellor and ultimately the minister in charge of HMRC.

Labour has called for Mr Zahawi to be sacked and for Mr Sunak to "come clean" on what he knew about the minister’s tax affairs when he appointed him party chairman.

Mr Zahawi sought to end questions about his tax affairs by releasing a statement saying questions were raised about his tax affairs when he was being appointed chancellor.

Rishi Sunak tells ITV News the appointment of the BBC chairman was managed by an "independent and rigorous" process

A challenging weekend for Mr Sunak began when police fined him for failing to wear a seatbelt as he filmed a social media clip from the back of a moving car.

The prime minister is also facing another headache as the Sunday Times reported BBC chairman Richard Sharp helped Boris Johnson secure a £800,000 loan weeks before recommending him for the role.

A public appointments watchdog is to investigate the selection of Mr Sharp. Earlier, Mr Sharp had asked for a scrutiny panel to examine potential conflicts of interest over his role in helping Mr Johnson secure a loan.

He insisted he was “not involved in making a loan or arranging a guarantee” for the then-prime minister, but acknowledged the row is a “distraction” for the broadcaster.

“I welcome any review that will clarify my role in this matter,” he said.

The Commissioner of Public Appointments William Shawcross said that he is to review the competition to appoint Mr Sharp as chairman of the BBC to ensure "the process was run in compliance with the government's governance code for public appointments."

Speaking to ITV News the PM said the appointment was made by a predecessor and the selection process was "independent and rigorous."

Mr Johnson, who was responsible for Mr Sharp’s appointment dismissed as a “load of complete nonsense”, insisting that Mr Sharp had no knowledge of his personal finances.

Mr Sharp was in the process of applying for the BBC chairmanship when he made the introduction and was subsequently appointed to the role at the corporation.

He said: “I was not involved in making a loan, or arranging a guarantee, and I did not arrange any financing. What I did do was to seek an introduction of Sam Blythe (sic) to the relevant official in government.”

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