FORMER chancellor Nadhim Zahawi has agreed to pay several million pounds in tax following questions over his finances.

Conservative Party chairman Mr Zahawi, who served as chancellor from July 5 to September 6 last year, has been questioned over whether he avoided tax by using an offshore company to hold shares in YouGov, a polling company he co-founded.

His family trust, Balshore Investments, is registered in Gibraltar and holds a stake worth more than £20 million in the company, but he reportedly sold it by the end of 2018.

Mr Zahawi, who has an estimated wealth of around £100m, said he was not a beneficiary of his family trust, but records have shown that money he owed YouGov was partly paid from Balshore Investments dividends. 

Balshore’s sale of YouGov shares should have led to a capital gains tax payment of around £3.7m, organisation Tax Policy has estimated. 

Mr Zahawi is now reportedly set to pay millions to settle a dispute with HM Revenue and Customs.

There has been speculation the payment is being made in part to halt government investigations into his taxes.

In July last year, Dan Neidle, founder of Tax Policy Associates, published an article titled “Did Nadhim Zahawi use an offshore tax trust to avoid almost £4m of capital gains tax?” in which he questioned the politician’s finances. 

Labour’s chairwoman Anneliese Dodds said: “If true, this is another nail in the coffin of the honesty, integrity and accountability promised by Rishi Sunak. 

“People are sick and tired of the constant sleaze and scandal surrounding this government.

“There are serious questions for both Nadhim Zahawi and Rishi Sunak to answer.

“Why did Nadhim Zahawi claim last summer that he had paid his taxes in full, and that he wasn’t aware of an investigation?

“Why did Nadhim Zahawi claim he was not a beneficiary of his family trust — Balshore Investments — when records show that the money he owed YouGov was paid from the trust?

“Not for the first time, Rishi Sunak’s judgement has been called into serious question. The question remains: is he strong enough to sack Nadhim Zahawi?”

A spokesman for Mr Zahawi said: “As he has previously stated, his taxes are properly declared and paid in the UK.”