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Blast from the past: Warwickshire Tory MP Nadhim Zahawi used firm in tax haven to buy his £1m home

This is a story from ten years ago. 

Owl still can’t get their head around someone so careless as to let a £5m bill to HMRC “slip between the cracks” could ever be fit to be Chancellor. Suppose it’s only small change to Rishi!

Les Reid www.coventrytelegraph.net 

Millionaire MP Nadhim Zahawi used a company in an offshore tax haven to buy his constituency home in Warwickshire.

Conservative MP Mr Zahawi – an adviser to David Cameron – used the company in low-tax Gibraltar as a lender to buy an estate and riding stables now worth £1 million in Upper Tysoe, near Stratford-upon-Avon, in 2011.

Berkford Investments Limited were traced to a PO box in the British overseas territory off Spain and to a residential address in Putney, south London.

Documents obtained from Companies House in Gibraltar show Berkford Investments Limited is managed by T&T Management Services Limited, which shares the same address.

Using offshore companies is commonplace and not unlawful. There is no suggestion that Mr Zahawi or his wife avoided any taxes by financing their purchase with a mortgage from the Gibraltar-based company.

Earlier this month, it was revealed that Mr Zahawi’s MP expense claims for his Upper Tysoe 31-acre ‘second home’ estate included energy bills of £5,800 in 2012/13, including for his riding school business.

MPs’ expenses can only be claimed “wholly, exclusively and necessarily” in performing Parliamentary duties.

Mr Zahawi initially denied wrongdoing, but later admitted a “mistake” in claiming for the riding school, and pledged to pay back any claim made in error.

“While a meter was installed in the stable yard I have only been receiving one bill and had not deducted usage on that meter from my claims,” he explained.

Mr Zahawi and his wife Lana used the Gibraltar company when the couple became the “registered owners” for Oaklands stables in May 2011, a year after the London-based wealthy businessman became MP for Stratford.

The couple bought the property for £875,000, and Berkford Investments Limited is registered as the “lender” for the purchase. Documents state a charge as security against the property is owned by the lender “Berkford Investments Limited (incorporated in Gibraltar)”.

Two addresses are given for the company – a residential property in Putney, London SW15, and 28 Irish Town, PO Box 15, Gibraltar. Company records trace Berkford Investments Limited back to 2006.

Gibraltar promotes itself as a low-tax location for finance and business. It features heavily in websites advising the wealthy on how to minimise taxes by setting up a company there.

Despite Gibraltar’s long-standing reputation as a tax haven, it is not among the Organisation for Economic Co-operation and Development’s list of “uncooperative tax havens” – set up to help stamp out tax evasion and improve transparency.

Mr Zahawi was asked whether he considered it politically unwise to have any arrangement with Berkford and T&T Management Services Ltd.

Mr Zahawi responded: “I did pay stamp duty on my property in Tysoe and have always paid stamp duty on my property purchases.

“I fully support the 2012 budget and all budgets of this government. I purchased my property in Tysoe with a mortgage from a Gibraltar company.

“This fact and the details involved are fully declared on the Land Registry and to suggest it is in any way hidden would be factually incorrect.

“Equally, to suggest that in any way I am using offshore to reduce my tax burden is entirely incorrect.”

* Rising Tory star Nadhim Zahawi, a Kurd whose family fled Iraq for the UK when he was nine, is also the registered owner of another residential property in Putney, which he bought for £1.85 million in December 2005.

The father-of-three’s business consultancy firm, Zahawi & Zahawi Ltd, is registered to this address with Companies House.

His declarations in the MPs’ Register of Financial Interests include his non-executive directorship of London-based SThree specialist recruitment firm, from which he receives a monthly salary of £2,916.67 for seven hours’ work attending board meetings.

Zahawi & Zahawi Ltd is also registered. Mr Zahawi’s shareholding in YouGov Plc is mentioned despite it being below the “registrable level”.

Mr Zahawi’s declarations under ‘Land and Property’ in last month’s MPs’ register of interests includes “31 acres of land in Warwickshire, with stables run as a livery yard by Zahawi & Zahawi Ltd.”

Also entered is: “Residential buy to let property in London, divided into three flats (Registered 12 June 2013).”

Land and Property entries in the register in January last year included: “One residential property in London, from which rental income is received, Sale of flat completed on 31 January 2011.”

His entry in September 2010 also listed: “One residential property in London, from which rental income is received.”

A previous version of this story which was first published in 2013 said T&T management services ltd’s website advertises its services as administering trusts for wealthy individuals and families to manage their assets, and avoid or minimise paying property taxes. We have been asked to point out T&T Management Services Limited is regulated by the Gibraltar Financial Services Commission to provide company management and trust services and they have advised that the business of TTMS does not include the avoidance or minimisation of property taxes. CoventryLive is happy to clarify this.

Cullompton’s relief road in doubt as Levelling Up bid fails again

“People across Tiverton & Honiton will rightly be outraged by this decision, which is holding up key projects like the Cullompton Relief Road and investment in both Axminster and Seaton” – Richard Foord MP.

Lewis Clarke www.devonlive.com

The future of Cullompton’s long-awaited relief road has been thrown into doubt after a bid for £19.5million Levelling Up funding failed. A second bid to the Government’s Levelling Up Fund, submitted by Mid Devon District Council has ended in disappointment following the announcement on Thursday, January 19.

The Council submitted a bid for £19.5 million of funds from the scheme which, combined with funding from Devon County Council and the Housing Infrastructure Fund, would have delivered the remaining money needed to build the town centre relief road for Cullompton. Despite a strong bid the Government has now confirmed the bid was unsuccessful.

It was one of a number of projects across Devon will failed to succeed in its bid. But bids for Appledore, Exmouth and Okehampton did succeed.

Councillor Richard Chesterton, cabinet member for planning and economic regeneration, said: “It is obviously extremely disappointing that Mid Devon has once again been unsuccessful. This was a high quality submission, supported by extensive technical evidence which clearly set out the need for funding in order to tackle existing transport and air quality challenges within the town, as well as the need to unlock strategic growth within the town.

“Clearly, the decision not to fund the delivery of the relief road will now directly limit housing and economic growth within Cullompton and have implications for the district as a whole.”

Even though the news is disappointing Mid Devon District Council remains committed to supporting investment in Cullompton, to address these existing challenges in the town and to realise strategic growth within the town as foreseen through the Local Plan.

The relief road, which has already secured planning permission, is considered to be a major strategic growth project for the district. Its delivery would unlock environmental and air quality improvements within Cullompton town centre, as well as unlock early growth capacity at J28. It is also needed to allow the area to meets its future housing delivery plans.

As such the Council will now seek other funding opportunities to support the delivery of the relief road whilst progressing the delivery of other key infrastructure projects, including the re-opening of Cullompton railway station by May 2025.

MP for Cullompton, Richard Foord added his frustration saying: “This news is a body blow for our communities, who have been crying out for this vital investment for years. By failing to honour their commitments to level up our part of Devon, the Conservatives have shown just how woefully out of touch they are.

“It’s clear they are continuing to take our communities for granted and have yet to hear the message from their by-election loss last summer. “People across Tiverton & Honiton will rightly be outraged by this decision, which is holding up key projects like the Cullompton Relief Road and investment in both Axminster and Seaton.

“I will continue to hold the Government to account and demand that the South West gets the investment we have long been promised – so we can unlock the true potential of our part of Devon.”

Speaking after a debate in the House of Commons he added: “Sat in the chamber and it’s pretty galling to hear Conservative MPs standing up one after the other to boast about the success of their Levelling Up bids – with some directly attributing it to the fact their party is in Government. No wonder Sunak’s patch got £19m while we got £0.”

Nadhim Zahawi misled his officials over Greensill texts from Cameron

Nadhim Zahawi wrongly told officials that he had not exchanged WhatsApp messages with David Cameron before it emerged that they had been deleted from his phone, The Times can disclose.

George Grylls, Billy Kenber www.thetimes.co.uk 

The Conservative Party chairman falsely claimed that he had not exchanged messages with Cameron when the former prime minister was trying to secure government loans for Greensill Capital.

It later emerged that the pair had discussed Greensill when messages from the instant-messaging phone app were released to a select committee inquiry into the lobbying scandal.

The revelations will add to pressure on Zahawi, who is facing calls to resign after he admitted reaching a settlement with HM Revenue and Customs over unpaid tax. He faced a reported bill of more than £5 million which included a tax penalty and interest payments over unpaid capital gains tax on shares in YouGov, the polling company that he co-founded. The shares, which were issued when the company was founded in 2000, were held by an offshore trust controlled by his father.

In a statement on Saturday describing it as a “careless, not deliberate” error, Zahawi said that his representatives had discussed and settled the issue with HMRC over the summer.

The settlement was agreed during his time as chancellor last summer, when he had direct oversight over tax policy, it has emerged. Zahawi admitted that an agreement was reached before he joined Liz Truss’s short-lived cabinet in September. It indicates it was negotiated and confirmed in less than two months. He has not confirmed the size of the payment.

Zahawi is fighting for his political career over the issue, which he initially dismissed last year as “smears”. Labour said that it was “corrosive to public trust”, and Sir Iain Duncan Smith, the former Conservative leader, told the BBC’s Sunday with Laura Kuenssberg that Zahawi should “get it all out now . . . and clear it up”. Angela Rayner, the Labour deputy leader, called for the release of all correspondence with No 10 and for Rishi Sunak to “come clean on what he knew and when” about Zahawi’s tax affairs. It was reported by The Sun on Sunday that Zahawi had been blocked from receiving a knighthood recognising his work as vaccines minister because of his tax affairs.

Separately, the Times can reveal further details about Zahawi’s involvement in the Greensill lobbying scandal along with Richard Sharp, the BBC chairman facing questions about a loan guarantee that he allegedly gave to Boris Johnson.

During the pandemic Cameron contacted Zahawi, who at the time was a minister in the Department for Business, Energy and Industrial Strategy, to ask for advice about approaching Sharp, a Tory donor and former banker who was advising Rishi Sunak when he was chancellor.

Cameron wrote: “Hi there. Well done with keeping going in the midst of all this. You’ve been v solid on the media. Lex Greensill — who I work with — says you are being v helpful over HMT and CBILS programme. Would it help if I pinged a message to Richard Sharp? I used to see him a bit in early leadership days but haven’t so much recently [. . .] All good wishes Dc.” There was no record of a reply from Zahawi. However, Cameron then sent a second message, saying: “Ta. Will do. Can you send me his contact details? Keep going! D.”

An investigation by the Information Commissioner’s Office has established that Zahawi did not tell officials about the messages following a freedom of information request from The Times. When civil servants in his private office asked if “he had any messages on his private mobile phone from David Cameron”, Zahawi replied “that he did not,” the inquiry found.

When the existence of the messages later emerged, officials returned to question Zahawi again. He then admitted that he had messaged Cameron but that the texts had been deleted.

“It is our understanding that Mr Zahawi does not know how the WhatsApp messages from Mr Cameron came to be deleted from his mobile phone,” the inquiry found.

Zahawi was approached for comment.

Revealed: Nadhim Zahawi’s legal threat to The Independent to stop tax revelations

This government will have integrity, professionalism and accountability at every level. – Rishi Sunak

The Conservative Party chairman Nadhim Zahawi tried to stop The Independent exposing that he was being investigated over his tax affairs by threatening to sue if we published.

Simon Walters www.independent.co.uk 

Mr Zahawi, who was chancellor at the time, repeatedly said he had paid “all due taxes” and would take legal action if we reported that he had been investigated.

The Independent ignored his threats and published two reports, detailing how Mr Zahawi had faced inquiries from the Serious Fraud Office, the National Crime Agency and HMRC.

Mr Zahawi did not sue or complain to this newspaper – and has now reportedly paid a penalty of more than £1m to HMRC in a settlement worth almost £5m in total.

In an extraordinary exchange before The Independent broke the story that he was being investigated last July, Mr Zahawi repeatedly threatened legal action:

• When asked about the NCA inquiry, he responded: “One hundred per cent I will take legal action.”

• When questioned about the HMRC probe, he responded: “I will take legal action.”

• When pressed for an answer, he responded: “I have responded to you. I repeat I will take legal action.”

The Independent first reported that Inland Revenue experts were investigating Mr Zahawi’s tax affairs on 6 July after a secret inquiry by the NCA in 2020.

That inquiry was codenamed “Operation Catalufa” – after a species of ray-finned fish, orange in colour found in deep waters in the Pacific known as Popeye Catalufa. The NCA inquiry was said to involve its International Corruption Unit.

Whitehall officials were told Mr Zahawi had not been informed because investigators were “trawling for information”. The NCA inquiry did not lead to action against Mr Zahawi.

On 9 July, The Independent reported officers from the Serious Fraud Office had investigated his financial affairs. The investigation had been passed to HMRC – controlled by the Treasury for which Mr Zahawi, as chancellor, was responsible. A Whitehall source said the tax investigation was “unresolved” at that time.

Then-prime minister Boris Johnson and home secretary Priti Patel and the Cabinet Office had all been informed.

Since the recent report that Mr Zahawi has agreed to pay millions to HMRC, he has been in hiding and refused to answer questions about the matter.

Last July, when we published our two stories, The Independent asked Mr Zahawi detailed questions.

Tory leadership contender Nadhim Zahawi claims tax investigation ‘a smear campaign’

In view of his refusal to respond following the recent reports, and amid growing pressure on him to do so from Labour and others, The Independent has decided to publish in full its correspondence with Mr Zahawi before our report on 9 July.

Asked now by The Independent to explain why he had said he would take legal action before our reports last July, Mr Zahawi did not respond.

Read the full exchange below:

6 July

The Independent:

Mr Zahawi, we have had it confirmed that your finances were investigated by NCA going back to 2019 (and are informed) they raised this matter with senior Whitehall figures.

Can you respond?

Can you give details?

Did you inform PM and Treasury of this when you accepted the job of chancellor?

Does this affect your ability to do your new job as chancellor?

Can you give assurances that you have paid all due UK taxes and obeyed all financial laws and regulations?

Nadhim Zahawi:

There was no such investigation by NCA. I have paid all due taxes and obeyed all financial laws and regulations.

The Independent:

We have spoken to a senior source who was approached by the NCA about it formally in 2019.

Nadhim Zahawi:

I would know if the NCA had investigated me. Right?

The Independent:

Are you adamant that the NCA never told you? Our source has a very clear memory of being approached by them formally and told they were looking at your finances.

Nadhim Zahawi:

One hundred per cent I will take legal action. I can confirm that the NCA never approached me/told me anything ever in my career.

The Independent:

We have spoken to someone who was involved in the matter. There definitely was an NCA inquiry.

We are reliably informed it was the International Corruption Unit of the NCA (and it) started in 2020. SFO also involved. (We understand that) Whitehall figures were informed at the time (and that) Boris Johnson was aware.

Was it raised with you by him or anyone else when he appointed you chancellor? Has it ever been raised with you?

No reply

7 July

The Independent:

Have you been informed since taking over as chancellor that NCA and HMRC have been investigating your tax affairs?

You said yesterday you did not know about this. Are you certain?

Are you aware that Boris Johnson, Priti Patel and Cab Office were briefed on this in 2020?

How can a chancellor take charge of tax when he has been investigated for possible tax avoidance? We believe the investigation is still live.

Can you respond?

No reply

8 July

The Independent:

We plan to (publish) a story stating that the NCA SFO and HMRC have all been involved in investigating your finances/taxes since 2020. And that they briefed No 10, Cab Off and Home Off on this. We have had this information confirmed.

Can you reply to the following?

Has the HMRC now informed you of this?

Doesn’t it present a conflict of interest?

Will you make your tax declarations public?

Nadhim Zahawi:

I will take legal action.

The Independent:

We have asked you straightforward questions based on reliable information on the grounds of a clear public interest.

Can you respond please?

Nadhim Zahawi:

I have responded to you. I repeat I will take legal action.

The Independent:

It is normal practice to ask a politician for a response to serious questions in the public interest so it can be weighed up prior to publication. It is reasonable to expect a considered reply.

We have also established that HMRC inquiry into your tax affairs was carried out by their tax fraud investigators and that the investigation is unresolved.

No reply