In September, Hunter Biden was indicted on separate gun-related charges…reports Asian Lite News
US President Joe Biden’s son Hunter Biden was indicted in California on nine counts related to a Justice Department investigation into his taxes, the media reported.
According to the indictment, filed in the US District Court for the Central District of California, the charges include failure to file and pay taxes, evading a tax assessment, and filing a false or fraudulent tax return, Xinhua news agency reported.
The indictment, the second criminal case that Special Counsel David Weiss has brought against the president’s son, showed that Hunter Biden engaged in a four-year scheme to not pay at least 1.4 million US dollars in federal taxes between 2016 and 2019.
Weiss first began investigating the president’s son five years ago as the US attorney for Delaware, appointed by former US President Donald Trump.
In September, Hunter Biden was indicted on separate gun-related charges.
Less than a year ahead of the 2024 presidential election, the US president will be fighting a Republican impeachment bid while his son, the first child of a sitting president to be criminally indicted, struggles to avoid prison in two criminal cases.
Hunt said he would cut the main rate of national insurance by 2 percentage points to 10% from Jan 6 at a cost of about £9bn…reports Asian Lite News
Chancellor Jeremy Hunt has cut business and personal taxes by £20bn in an Autumn Statement aimed at boosting growth, but the UK’s budget watchdog warned that overall taxes are still rising to a postwar high.
The independent Office for Budget Responsibility shed a harsh light on Hunt’s fiscal plan, saying it would provide only “a modest” boost to growth and would see the tax burden rise for each of the next five years.
In a highly political statement on Wednesday, Hunt said he would cut the main rate of national insurance by 2 percentage points to 10 per cent from January 6 — the start of what is expected to be an election year — at a cost of about £9bn.
The other big measure saw the chancellor make permanent the “full expensing” capital allowance regime, at a cost rising to £11bn, which he described as “the largest business tax cut in modern British history”.
The timing of the national insurance cuts — benefiting 27mn working people — prompted speculation the government wants to leave open the option of a spring general election if its dire opinion poll ratings improve.
But the OBR said the tax cuts were dwarfed by the impact of the government’s freeze on tax thresholds between 2022-23 and 2028-29; it said nearly 4mn more people would end up paying income tax for the first time and 3mn more would move to the higher rate.
“While personal and business tax cuts reduce the tax burden by half a percentage point, it still rises in each of the next five years to a postwar high of 38 per cent of GDP,” the fiscal watchdog said.
Rachel Reeves, shadow chancellor, accused the government of presiding over record tax rises because of such “fiscal drag”, but did not commit Labour to opposing any of Hunt’s policy measures. Sir Ed Davey, Liberal Democrat leader, called the Autumn Statement “a hoax”.
The OBR also cut its forecast for economic growth and warned that the Autumn Statement’s measures to kick-start the economy would provide only “a modest boost to output of 0.3 per cent in five years”.
The chancellor had opted to leave government departmental spending “broadly unchanged”, the OBR said, reducing borrowing by £27bn compared with prior forecasts but leaving budgets squeezed.
Hunt said he would set a new target to keep public spending growth below overall economic growth “while always protecting services”.
Hunt claimed that, with inflation falling to 4.6 per cent and the OBR showing that debt was on a sustainable path, it was time to take the foot off the fiscal brake.
“Our plan for the British economy is working but the work is not done,” the chancellor said, as he set out 110 supply-side measures, intended to boost business, bring the sick back to work and get more capital flowing into the economy.
The full expensing of capital investment, which was due to expire in 2026, allows a company to immediately deduct all of its spending on IT equipment, plant or machinery from taxable profits. Extending it was a priority for business groups.
The chancellor said the measures would increase business investment in the economy by about £20bn a year within a decade and were “a decisive step towards closing the productivity gap with other major economies”.
The OBR said it expected the economy to grow 0.6 per cent this year and 0.7 per cent next year. This compares with the watchdog’s previous forecasts of a 0.2 per cent contraction this year and 1.8 per cent growth in 2024. The Bank of England expects growth to remain flat next year.
The chancellor confirmed that the state pension would rise by 8.5 per cent in April and that universal credit and other benefits would increase by 6.7 per cent, in line with September inflation, rather than the lower October level.
The OBR forecast that living standards, as measured by real household disposable income per person, would be 3.5 per cent lower in 2024-25 than their pre-pandemic level.
“While this is half the peak-to-trough fall we expected in March, it still represents the largest reduction in real living standards since Office for National Statistics records began in the 1950s,” it said.
Hunt also promised measures “to unlock the building of more homes” in the UK, which has consistently fallen short on government housebuilding targets.
These include a plan to refund planning fees if local authorities take too long to handle applications and £32mn to “bust the planning backlog”. Hunt also said he would freeze duty on alcohol, a move applauded by the industry.
The chancellor had been expected to hold off from cutting taxes until next year as he and Rishi Sunak continue to focus on reducing inflation..reports Asian Lite News
Jeremy Hunt is considering slashing the UK inheritance tax rate in next week’s autumn statement after economic forecasters told the chancellor he would have more money to spend thanks to rising tax revenues and falling borrowing costs.
Hunt is weighing up big cuts to the tax people pay after inheriting wealth, paid for in part by better than expected government spending forecasts and by raising benefits by less than expected.
The chancellor had been expected to hold off from cutting taxes until next year as he and Rishi Sunak continue to focus on reducing inflation.
But after UK inflation fell further than expected last month and with Tory MPs clamouring for a pre-election giveaway, sources say the chancellor is open to the idea of doing it sooner.
“Cutting inheritance tax is an option being considered, but it all depends on affordability,” said one person who has been briefed on the options under consideration.
Officials at the Office for Budget Responsibility (OBR) will present their forecasts to the chancellor on Friday for how much “headroom” he has to spend on giveaways without breaking his own fiscal rules.
In the spring the OBR said he could spend an extra £6.5bn and still have debt falling as a proportion of gross domestic product in five years’ time. The Resolution Foundation thinktank has predicted that could now be £13bn, although reports suggest it could be even higher.
Hunt is also considering raising extra revenue by putting benefits up by 4.6% to keep up with October’s inflation figures, rather than 6.7%, which would be in line with September’s figures. This change could save ministers £2bn but would hit an estimated 9m households and cost single mothers an estimated £218 a year.
Hunt and the prime minister have been under pressure for months to use the autumn statement to cut taxes, a move many Tory backbenchers believe will help the party erode some of Labour’s 20-point lead in opinion polls. This week the Conservatives fell to just above 20% in the polls, a level not seen since the aftermath of Liz Truss’s disastrous “mini-budget”.
Nadhim Zahawi, a multimillionaire former Conservative chancellor, has led a campaign to abolish the tax, calling it “the other spectre that haunts us alongside death”.
Hunt is open to the idea of a cut partly because inheritance tax is highly unpopular with Conservative voters and partly because it would cost less than cutting income tax. The Times reported on Friday he was considering reducing the rate from 40% to either 30% or 20%, with a promise to abolish it altogether in the next Tory manifesto.
The Institute for Fiscal Studies has said abolishing inheritance tax would cost an estimated £7bn a year, half of the benefit of which would be enjoyed by people inheriting estates worth £2.1m or more. The potential loss to the Treasury rises to almost £15bn a year by 2032.
The chancellor is also reported to be considering extending tax cuts for businesses that allow them to claim back what they spend on new machinery and office equipment in tax allowances. Hunt said in the spring that he would allow “full expensing” for a trial period of three years, but is now said to be prepared to make the scheme permanent.
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Inflation slows to 4.6%
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Meanwhile, inflation fell sharply in October to its lowest rate in two years, largely due to lower energy prices. Inflation, which measures the rate at which consumer prices rise, dropped to 4.6% in the year to October, down from 6.7% the month before.
The government says its pledge to halve inflation by end of the year has been met early. But there is a limit to how much credit ministers can take for the fall as energy prices settle.
Economists have said the main reason inflation has fallen from its peak of 11.1% in October 2022 is due to a fall this month in the energy price cap, which limits what suppliers can charge consumers per unit of energy. They also note the Bank of England’s decision to raise interest rates, in a bid to cool demand in the UK economy and slow price rises.
Rates are currently at 5.25%, a 15-year high, which has pushed up mortgage costs but also led to higher savings rates.
Paul Johnson, director of the Institute for Fiscal Studies (IFS), an influential economics think tank, said that ministers did not “have a lot of control” over cutting inflation.
Grant Fitzner, chief economist at the Office for National Statistics (ONS), said price rises slowed in October as “last year’s steep rise in energy costs has been followed by a small reduction in the energy price cap this year”.
The revenue collected from this tax could then be utilized for India’s green energy initiatives, benefitting companies transitioning towards cleaner energy and subsequently reducing their carbon footprint…reports Asian Lite News
Commerce and Industry Minister Piyush Goyal hinted at India’s contemplation of a domestic tax on specific sectors. The purpose is to aid the nation’s shift toward green energy and address the European Union’s carbon tax. Goyal criticised the EU’s decision, labelling it as “ill-conceived” and potentially detrimental to the EU’s manufacturing sector. He expressed hope that the EU would recognize the flaws in their Carbon Border Adjustment Mechanism (CBAM) and reconsider its implementation.
The EU’s plan to enforce a carbon tax by 2026 has already necessitated data sharing on carbon emissions from several carbon-intensive sectors. India vehemently opposes this move and is actively engaged in dialogues with the EU to resolve the issue. Goyal outlined India’s potential strategy: implementing a domestic tax aligned with European carbon tax rates. The revenue collected from this tax could then be utilized for India’s green energy initiatives, benefitting companies transitioning towards cleaner energy and subsequently reducing their carbon footprint.
Acknowledging the uncertainties surrounding these tax implementations, Goyal assured ongoing discussions with the EU to gain clarity. He emphasized the need for a fair approach that considers different values for carbon pricing, particularly in less-developed and developing countries. Goyal conveyed India’s commitment to resolving this matter while ensuring that utilizing taxes for domestic green initiatives would maintain competitiveness in India’s exports to Europe.
Goyal at the Observer Research Foundation’s (ORF) first edition of the Energy Transition Dialogue in New Delhi on Thursday said, “India’s energy transition has a very large end-to-end dimension and the government is working towards the goal of meeting the country’s energy needs with a clean source.”
According to an official release issued by the Ministry of Commerce and Industry, Goyal said that for the next 30 years, India is going to see a huge amount of growth in the economy and that is going to lead to significant demand for energy in all walks of life, so India’s energy transition has two dimensions: transit from past consumption levels and what we do to meet the needs of this growth.
“In the circumstances that we are in, India has been upping its targets on almost every aspect of the energy transition story by getting clean energy into the system,” he said, adding that India is working on many fronts.
Sunak has previously said he wants to cut taxes but only once the hole in the public finances has been fixed and he has also pledged to halve inflation this year…reports Asian Lite News
Prime Minister Rishi Sunak wants to cut taxes by as much as 2 pence in the pound before the next national election which is expected in 2024, the Telegraph newspaper reported.
Government officials believed that a slower-than-expected fall in Britain’s high inflation rate would not prevent a tax cut from April, the paper said without citing its sources.
Sunak has previously said he wants to cut taxes but only once the hole in the public finances has been fixed and he has also pledged to halve inflation this year.
The Prime Minister is seeking to reduce National Insurance or the basic rate to incentivise work as inflation falls
The Telegraph said the tax cuts under consideration could be introduced via Britain’s National Insurance social security system or personal income tax.
Sunak’s Conservative Party is far behind the opposition Labour Party in opinion polls. Many Conservative lawmakers want Sunak to cut taxes, even as demands grow for more spending on public services, including the health system.
The Telegraph said Sunak wanted to follow up on tax cuts in 2024 by going into the next election with a revived pledge to cut income tax rates by 1p in each year of the next parliament.
Demands at the event ranged from the reintroduction of tax breaks on shopping for overseas visitors to better co-operation with business and more “concrete” actions by government…reports Asian Lite News
Jeremy Hunt admitted on Monday that British corporate taxes were too high, as business called on the government to make good on promises to mend ties with the private sector.
Speaking at a set-piece event with about 250 corporate leaders intended to counter Labour’s charm offensive with business, the UK chancellor said the economy needed to grow more to bring taxes down.
“The tax burden is too high. We would like to bring it down,” Hunt said at the Business Connect event, acknowledging a backlash to the government’s decision to increase corporation tax from 19 per cent to 25 per cent this month. “The way we will bring the tax burden down is through growth.”
But even as he and Rishi Sunak promised to “listen” and “engage” with the private sector, with the prime minister declaring himself “unashamedly pro-business”, they were repeatedly pressed on their strategy for growth and trade.
Demands at the event ranged from the reintroduction of tax breaks on shopping for overseas visitors to better co-operation with business and more “concrete” actions by government.
Gerry Murphy, chair of luxury goods brand Burberry, said the post-Brexit withdrawal of value added tax breaks on UK shopping by overseas visitors had made the country the least attractive shopping destination in Europe.
“The UK is, by far, the weakest recovery of all those major [European] markets [in Burberry trading],” he added. “We are actively exporting business as a result of that policy to our continental competitors.”
There is a growing sense of Groundhog Day as we wait for concrete policy developments
Romi Savova, chief executive of financial services company PensionBee, said: “Many business leaders have engaged with the government across multiple events and there is a growing sense of Groundhog Day as we wait for concrete policy developments.”
Conservative party insiders privately admit that Labour leader Sir Keir Starmer has led a highly successful charm offensive with business in recent months, alongside shadow chancellor Rachel Reeves.
Sunak’s appointment of former Morgan Stanley executive Franck Petitgas as his new business and investment adviser is a sign of a new effort by the government to improve relations with corporate leaders.
Sunak also announced £100mn in government funding for a task force aimed at accelerating Britain’s capabilities in an area of artificial intelligence known as “foundation models” — which is used in chatbots such as OpenAI’s ChatGPT.
The prime minister said he would bear in mind the call to restore the VAT break, but government insiders said ministers were unlikely to take such a move, which they claimed could cost £2bn a year.
The chancellor added that it was right to have imposed a windfall tax on energy companies’ profits but that he would keep “a dialogue going . . . because we need to unlock investment in the North Sea”.
A statement from Sunak’s accountants on Wednesday showed that his huge investment income and capital gains relate to a single US-based investment fund…reports Asian Lite News
Rishi Sunak has published his long-awaited personal tax returns – revealing his mammoth income from a US-based investment fund outside of his salary at Westminster.
The prime minister has raked in more than £4.7m over the past three years, the summary of his tax returns published for 2019-2020 to 2021-22 have revealed.
He made more than £1.9m last year alone – including £1.6m in capital gains and more than £300,000 in earnings and investment income.
And the PM paid more than £1m in UK tax over the three-year period, including £432,000 last year.
Sunak’s financial affairs have come under intense scrutiny ever since The Independent first revealed his wife Akshata Murty held “non-dom” tax status to avoid UK tax on foreign income.
She later renounced the non-dom status. But it subsequently emerged that Sunak had held a US green card and filed tax returns in America while he was chancellor.
Details of the couple’s fortune, believed to total around £730m, are also politically sensitive following warnings last week that Britons face a lost decade in living standards.
A statement from Sunak’s accountants on Wednesday showed that his huge investment income and capital gains relate to a single US-based investment fund.
This is the investment listed as a “blind management arrangement” on the list of ministers’ interests. Sunak is subject to UK tax on the investment income and gains received from the American fund.
Tax expert Dan Neidle said Sunak had done nothing wrong – but noted how little capital gains are taxed compared with income, saying Mr Sunak paid only 20 per cent tax on the £1.6m made from it last year.
Neidle – who probed ex-chancellor Nadhim Zahawi’s tax affairs – said “there is one interesting point: most of the £400,000 tax bill comes from the blind fund which doesn’t pay cash to him. So how does he pay the tax bill, given it’s so much more than he earns?”
Fellow tax expert Richard Murphy tweeted: “What do Sunak’s tax returns tell us? It is that a wealthy person with income beyond their immediate needs can always re-categorise large parts of that income as capital gains to reduce their tax rate on that part to 20 per cent, which is an insult to all who have to work for a living.”
The FM also allowed a Rs 50,000 standard deduction to taxpayers under the new regime, where assessees cannot claim deductions or exemptions on their investments…reports Asian Lite News
While the Narendra Modi-led Central government presented Wednesday its last full-fledged Budget ahead of the 2024 general elections, Union Finance Minister Nirmala Sitharaman announced that the new tax regime will now be the default tax regime.
The FM also announced an increase in the income tax rebate limit from Rs 5 lakh to Rs 7 lakh under the new tax regime. “Currently, those with an income of Rs 5 lakh do not pay any income tax and I propose to increase the rebate limit to Rs 7 lakh in the new tax regime,” the Finance Minister said while presenting the Budget.
While a five per cent tax will be levied on total income between Rs 3 lakh and Rs 6 lakh, 10 per cent will be levied on Rs 6 lakh to Rs 9 lakh, 15 per cent on Rs 9 lakh to Rs 12 lakh, 20 per cent on Rs 12 lakh to Rs 15 lakh and 30 per cent on Rs 15 lakh and above.
Here are the revised tax slabs under new tax regime
Income of Rs 0-3 lakh is nil.
Income above Rs 3 lakh and up to Rs 6 lakh to be taxed at 5% under new regime.
Income of above Rs 6 lakh and up to Rs 9 lakh to be taxed at 10% under new regime.
Income above Rs 12 lakh and up to Rs 15 lakh to be taxed at 20% under new regime.
Income above Rs 15 lakh to be taxed at Rs 30%.
The government, meanwhile, also proposed to reduce highest surcharge rate from 37 per cent to 25 per cent in new tax regime.
While explaining the new tax regime, Finance Minister Nirmala Sitharaman also spoke about the losses the Centre would undertake for facilitating it. “India will lose Rs 35,000 crore of net tax revenue to provide relief to the middle-income group. “Revenue of about Rs 38,000 crore — Rs. 37,000 crore in direct taxes and Rs 1,000 crore in indirect taxes — will be forgone while revenue of about Rs 3,000 crore will be additionally mobilized. Thus, the total revenue forgone is about Rs 35,000 crore annually,” she said.
The FM also allowed a Rs 50,000 standard deduction to taxpayers under the new regime, where assessees cannot claim deductions or exemptions on their investments.
It may be recalled that the Finance Minister did not announce any change in income tax slabs in the last Budget.
Meanwhile, the FM had, last month, defended the new income tax regime saying it had not reversed any gains from the old regime’s simplicity. “If indeed there were gains of simplicity (from the old income tax regime), I want to assure they have not been reversed,” Sitharaman said in New Delhi. “For every tax assessee, it has 7, 8, 9, 10 exemptions. And with all that exemptions, the rate 10, 20, 30 per cent continues. It continues even today. We have not removed it. What we have done in the name of simplicity and to avoid harassment… removing harassment was what was aimed at when we brought in faceless tax assessment,” she added.
The government in Budget 2020-21 brought in an optional income tax regime, under which individuals and Hindu Undivided Families (HUFs) were to be taxed at lower rates if they did not avail specified exemptions and deductions, like house rent allowance (HRA), interest on home loan, investments made under Section 80C, 80D and 80CCD. Under this, total income up to Rs 2.5 lakh was tax exempt.
Currently, a 5 per cent tax is levied on total income between Rs 2.5 lakh and Rs 5 lakh, 10 per cent on Rs 5 lakh to Rs 7.5 lakh, 15 per cent on Rs 7.5 lakh to Rs 10 lakh, 20 per cent on Rs 10 lakh to Rs 12.5 lakh, 25 per cent on Rs 12.5 lakh to Rs 15 lakh, and 30 per cent on above Rs 15 lakh.
The scheme, however, has not gained traction as in several cases it resulted in higher tax burden.
“In simple words, the enhancement of this limit to seven lakh rupees means that the person whose income is less than Rs.7 lakhs need not invest anything to claim exemptions and the entire income would be tax-free irrespective of the quantum of investment made by such an individual. This will result in giving more consumption power to the middle-class income group as they could spend the entire amount of income without bothering too much about investment schemes to take the benefit of exemptions” explained Abhishek A Rastogi, Founder of Rastogi Chambers
The income tax changes rolled out to cost the govt revenue of about ₹38,000 crore. As a result of these proposals, revenue of about ₹38,000 crore – ₹37,000 crore in direct taxes and ₹1,000 crore in indirect taxes – will be forgone while revenue of about ₹3,000 crore will be additionally mobilized. Thus, the total revenue forgone is about ₹35,000 crore annually
Proposal for the salaried class and the pensioners including family pensioners, for whom proposed to extend the benefit of standard deduction to the new tax regime. Each salaried person with an income of ₹15.5 lakh or more will thus stand to benefit by ₹52,500: FM
The Prime Minister Rishi Sunak and Chancellor of the Exchequer Jeremy Hunt meet in Downing Street. Picture by Simon Walker / No 10 Downing Street
Hunt took aim at Labour, citing Keir Starmer’s pledge not to reopen the big government chequebook. The chancellor claimed the party had since made tens of billions of unfunded spending commitments…reports Asian Lite News
Jeremy Hunt has signalled tax cuts will only come “when the time is right” and be matched by “spending restraint”, as he sought to temper restive Conservative backbenchers’ expectations ahead of the budget in March.
However, the chancellor said he hoped to inject what he described as much-needed optimism about the country’s future, saying he wanted Britain to “have nothing less than the most competitive tax regime of any major country”.
In a speech at Bloomberg, the chancellor targeted economic inactivity and urged those who retired early after the Covid pandemic, or struggled to find a new job after the furlough scheme ended, to rejoin the workforce.
“We need you, and we will look at the conditions necessary to make it worth your while,” the chancellor said.
Hunt blamed Britain’s woes on “economic headwinds” that affected many countries, citing favourable growth statistics, and inflation remaining higher in 14 European Union countries. “Declinism about Britain is just wrong,” he said.
However, after pressure from Tory MPs – including the Conservative Growth Group founded by allies of Liz Truss – Hunt stressed that investment would only follow financial stability, and gave little hope that his March budget would reduce the tax burden.
“Confidence in the future starts with honesty about the present,” he said.
Hunt said “we need lower taxes” and that high rates “affect the incentives” of businesses to invest, but stressed that “sound money must come first”.
“Our ambition should be to have nothing less than the most competitive tax regime of every major country,” he said, but that would mean “restraint on spending”.
“When the whole economy grows, wages go up, unemployment goes down, and life gets better for everyone”.
The creation of “mini-Canary Wharfs” – how Hunt dubbed the plan to reinvent Truss’s low-regulation, low-tax “investment zones” – was promised, with details about where they would be located to be announced “shortly”.
Hunt took aim at Labour, citing Keir Starmer’s pledge not to reopen the big government chequebook. The chancellor claimed the party had since made tens of billions of unfunded spending commitments.
After a cabinet away-day at Chequers, where ministers discussed gloomy polling, Hunt signalled his ambitions would not be realised immediately – paving the way for further announcements in the run-up to the next election about ways to boost growth.
“This is a project that is not going to happen in the next 18 months or the time span before the next election,” Hunt said. However, he still tried to provide hope to glum Tory MPs, adding: “Even in really difficult times, we can make incredible progress.”
Labour said Hunt and Sunak had no plan to fix “13 years of Tory economic failure”.
Rachel Reeves, the shadow chancellor, said: “Britain has so much potential. From creating good, new jobs in the industries of the future, to making our country the best place to start and grow a business, Labour’s proper plan for growth will grasp those opportunities and make our economy stronger to face up to the challenges.
“Thirteen years of Tory economic failure have left living standards and growth on the floor, crashed our economy, and driven up mortgages and bills. The Tories have no plan for now, and no plan for the future. It’s time for a Labour government that will build a better Britain.”
Nadhim Zahawi leaves 10 Downing Street after being appointed Chancellor of the Exchequer. Picture by Simon Dawson / No 10 Downing Street
Prime Minister orders probe into the tax affairs of the chairman of his governing Conservative Party, saying there are “questions that need answering” about the dealings…reports Asian Lite News
Prime Minister Rishi Sunak has ordered an investigation into the tax affairs of the chairman of his governing Conservative Party, saying there are “questions that need answering” about the dealings.
Sunak said that he had asked his independent ethics adviser Laurie Magnus to look into Nadhim Zahawi’s multimillion-pound case, which relates to the 55-year-old’s co-founding of opinion polling firm YouGov in 2000 before he became a member of Parliament.
“Integrity and accountability is really important to me … There are questions that need answering and that is why I have asked our independent adviser to get to the bottom of everything,” Sunak told reporters.
He added that Zahawi would remain as party chairman during the investigation and had agreed to “fully cooperate” with the probe.
Zahawi said he welcomed the move and looked forward to explaining the “facts of the issue”, adding he would not discuss it further while the investigation was under way.
He has previously said the United Kingdom’s tax authorities ruled he had been “careless” with his declarations but had not deliberately made an error to pay less tax.
Zahawi has said questions were raised about his tax affairs when he was made finance minister last year by former Prime Minister Boris Johnson, prompting him to raise them with government officials and the tax office, which disagreed with the number of shares given to his father.
“So that I could focus on my life as a public servant, I chose to settle the matter and pay what they said was due, which was the right thing to do,” he said in a statement on Saturday.
He also said the tax office found he had not set up offshore tax arrangements, but the statement did not address whether he paid a penalty to the tax office.
A tax policy website – Tax Policy Associates – has estimated that Zahawi should have paid 3.7 million pounds ($4.6m) based on the capital gains tax incurred by the sale of tranches of shares in YouGov worth more than 20 million pounds ($24.7m).
The Guardian newspaper has reported that tax authorities had imposed a 30 percent penalty on top of the owed tax.
According to the government’s website, a penalty of 30 percent can be paid when there is “lack of reasonable care” or when the error is considered to be deliberate.
In the three months since Sunak became prime minister, his government has been buffeted by questions over the probity of some ministers and legislators after he promised to lead the country with “integrity, professionalism and accountability”.
The opposition Labour Party said Sunak, who assumed office after his two predecessors were brought down first by scandal and then economic chaos, was too weak to sack Zahawi.
“Everybody knows it’s wrong. He clearly isn’t going to resign and so the prime minister needs to show some leadership,” Labour Party leader Keir Starmer told reporters on Monday.
“This is a test of the prime minister. He promised us, his first words were integrity and accountability. Well, if those words mean anything, the prime minister should sack him and sack him today.”
Zahawi not planning to resign
Meanwhile, Zahawi is defying demands to quit as Conservative Party chairman despite paying a penalty to resolve a multimillion-pound tax dispute with HM Revenue & Customs.
Allies said on Monday that the former chancellor “absolutely” will not be quitting amid growing pressure over his estimated £5 million settlement.
Further “cronyism” allegations emerged as Rishi Sunak was already being urged by Labour to sack Mr Zahawi, who he brought back into a Cabinet-attending role after entering No 10.
Zahawi is also facing new allegations that he falsely told officials he had not exchanged WhatsApp messages with Conservative former prime minister David Cameron, who was lobbying for government loans for Greensill Capital.
The Times reported that it later emerged the pair had discussed the since-collapsed firm when messages were released to a select committee inquiry.
Zahawi said “morning” to waiting reporters and cameras as he arrived at Conservative Campaign Headquarters (CCHQ), but gave no comment on his financial affairs or position.
Former Downing Street communications chief Sir Craig Oliver said Mr Zahawi is “hanging on by a thread”. “I think he’s in serious trouble, you cannot be Conservative Party chairman and not go out and face the media,” he told BBC Radio 4’s Today programme.
“The problem for Nadhim Zahawi at the moment is it doesn’t all add up. Why did you take the job as chancellor when you were clearly in dispute with the HMRC, and he is yet to come out with an answer that is satisfying or feels comfortable on that point.”
Seizing on the Greensill allegations, deputy Labour leader Angela Rayner said “yet another” of Mr Zahawi’s stories was “unravelling”.
