‘Livid’ Sunak refuses to speak to Zahawi after tax row

Rishi Sunak is said to be “livid” with Nadhim Zahawi as the fallout of the party chairman’s tax affairs continue.

The prime minister has not spoken to his party chairman since he revealed details of his settlement with HM Revenue and Customs at the weekend, it has been reported.

He is said to be frustrated that his colleague initially failed to disclose that he had paid a penalty for tax avoidance as part of an estimated £4.7 million settlement.

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An ally of Mr Sunak The Times: “Rishi is trying to do the right thing in terms of process but he’s livid.

“He wants to get on with things but this is just a gift to Labour. He’s [the prime minister] acted in good faith.”

Tory MPs told The Independent they believe that Mr Sunak was “increasingly irritated” with Mr Zahawi and was preparing to fire him if Sir Laurie Magnus’ probe into the tax saga found any wrongdoing.

Appearing to distance himself from his cabinet colleague at PMQs, Mr Sunak suggested it would have been “politically expedient” to have sacked the Tory chair – but that he wanted the ethics adviser’s probe to play out.

Mr Bowie – a close Sunak ally – told BBC Politics Live: “If [Mr Zahawi] is found to have fallen foul in this report, the prime minister will of course sack him.”

Asked about those comments, senior Tory MP David Davis told The Independent: “He will have been authorised to say that, I think. At the end of the process, either he’s safe or he goes – there won’t be any grey area. What’s the half-penalty?”

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Mr Sunak told MPs yesterday: “The issues in question occurred before I was prime minister. With regard to the appointment of the minister without portfolio, the usual appointments process was followed, no issues were raised with me when he was appointed to his current role and since I commented on this matter last week more information has come forward and that is why I have asked the independent adviser to look into the matter.”

The dispute led to more scrutiny over the prime minister’s own tax affairs. Downing Street last night confirmed that Sunak had never paid a fine to HMRC.

The cabinet will meet today at Chequers, the prime minister’s grace-and-favour residence, to discuss political strategy before the next election however Mr Zahawi is not expected to play a significant role according to reports.

Work and Pensions Secretary Mel Stride said the result of that investigation, which the Prime Minister announced on Monday, could take just 10 days.

It means the conclusions could be on Mr Sunak's desk as early as the tail end of next week.

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Lord Barwell, who served as Downing Street chief of staff to Theresa May, said the lack of public defence being offered for Mr Zahawi suggested his role could be in jeopardy.

The Conservative peer told Channel 4 News: “I think when you see other ministers not willing to defend a colleague and when you see No 10 confirming that ‘we didn't know these facts when the prime Minister said that,’ it gives you an indication of which way the wind is blowing.”

Asked whether the “game might be up”, the former MP appeared to nod his head in agreement.

A former minister told The Independent that Mr Sunak’s remarks at PMQs showed he was “clearly becoming increasingly irritated” with Mr Zahawi. The senior Tory added: “Nadhim would be very wise to step down, even if he announces it is only on a temporary basis.”

Despite Mr Bowie’s remarks, No 10 suggested Mr Sunak may not sack Mr Zahawi even if he breached the ministerial code. The PM’s spokesperson said: “Recently the code was updated so it’s no longer a binary decision.”

Changes to the ministerial code – which demands ministers are transparent and honest –allows ministers to apologise and temporarily lose their pay rather than having to resign for any breaches.

Mr Zahawi dismissed reports of an HMRC review into his taxes – first revealed by The Independent last year – as a “smear”, but on Saturday he admitted he had settled a tax dispute.