Labour questions Zahawi over £26m business loan and personal tax affairs

Elliot Chappell
© I T S/

Labour’s Pat McFadden has challenged Nadhim Zahawi over his personal finances and tax affairs including questioning his dealings with the Gibraltar-based firm Balshore Investments, which is controlled by his parents.

In a letter to the Chancellor today, the shadow minister wrote that “as the custodian of the public finances and the guardian of the UK tax code it is obviously important that the public is assured that your tax affairs are fully in order”.

Balshore Investments was the recipient of shares in YouGov, the pollster founded by Zahawi, while Zahawi received no shares himself. YouGov has described Balshore Investments as a “family trust of Nadhim Zahawi”. The Chancellor has said he “does not have, and never has had” an interest in the firm and he is “not a beneficiary”.

The Observer reported on Sunday that Balshore Investments sold shares in YouGov worth £26m in 2018 and that the funds were transferred to an unknown recipient. The Chancellor’s family’s property firm in the UK – Zahawi and Zahawi – received loans of £26m the same year from undisclosed sources.

McFadden has asked the Chancellor why Balshore Investments received 42.5% of YouGov shares when the pollster was founded and why Zahawi received no shares despite being one of the founders.

“Is there any connection between the unsecured loans provided to Zahawi and Zahawi for its property investments and the £26m which Balshore Investment may have made in capital gains as a result of selling holdings in YouGov?” he wrote.

Zahawi has described the reports of his tax affairs as “smears”. He said last week: “I’ve always declared my financial interests and paid my taxes in the UK. If there are questions, of course, I will answer any questions HMRC has of me.”

Zahawi, who had been Education Secretary, was appointed Chancellor in a week that saw more than 50 Conservative ministers quit the government. 48 hours after accepting the position, Zahawi called on Johnson to resign.

After Boris Johnson announced last week that he would be standing down as Tory leader and Prime Minister, Zahawi put himself forward as a potential replacement but was eliminated in the first round of voting by Conservative MPs. He is currently serving as the Chancellor in Johnson’s ‘caretaker’ government.

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