RISHI Sunak has sacked Nadhim Zahawi as Tory party chairman for a “serious breach” of the ministerial code over his tax affairs.

Mr Zahawi had been refusing to quit after it emerged he settled a tax bill and penalty estimated at £4.8million with HMRC while Chancellor last year.

The Prime Minister dismissed him this morning after an investigation by the independent adviser on ministers’ interests, Sir Laurie Magnus.

Sir Laurie concluded Mr Zahawi "failed to meet the requirement to declare any interests which might be thought to give rise to a conflict”.

He reported: "Mr Zahawi failed to disclose relevant information – in this case the nature of the investigation and its outcome in a penalty – at the time of his appointment, including to Cabinet Office officials who support that process.

“Without knowledge of that information, the Cabinet Office was not in a position to inform the appointing Prime Minister.

“Taken together, I consider that these omissions constitute a serious failure to meet the standards set out in the ministerial code.”

“I consider that Mr Zahawi, in holding the high privilege of being a Minister of the Crown, has shown insufficient regard for the General Principles of the Ministerial Code and the requirements in particular, under the seven Principles of Public Life, to be honest, open and an exemplary leader through his own behaviour."

In a letter released by Downing Street, Mr Sunak said the findings, which had been shared with Mr Zahawi, showed “it is clear there has been a serious breach of the Ministerial Code”. 

He reminded Mr Zahawi then when he became Prime Minister, he pledged the Government he lead "would have integrity, professionalism and accountability at every level".

He went on: “As a result, I have informed you of my decision to remove you from your position in His Majesty’s Government.”

However he also thanked the Stratford-on-Avon MP for his work in office and said he should be “extremely proud” of his wide-ranging achievements, including as vaccines ministers during the Covid pandemic.

“Your role was critical to ensuring our country came through this crisis and saved many lives,” he wrote.

"And as the Conservative Party Chairman, you have undertaken significant restructuring to Conservative Campaign Headquarters and readied us for important work in the coming months.

"It is also with pride that I, and previous Prime Ministers, have been able to draw upon the services of a Kurdish-born Iraqi refugee at the highest levels of the UK Government. 

"That is something which people up and down this country have rightly vaued."

Mr Zahawi's tax problems relate to Gibraltar-based Balshore Investments, and whether Mr Zahawi used it to hold shares in the polling company YouGov, which he founded in 2000 and made him a millionaire.

In his reply to the PM, Mr Zahawi, who threatened to sue those looking into his tax affairs, again blamed the media and did not apologise.

Instead, he cited the vaccine rollout and the arrangements for mourning the Queen as being among his "achievements in government".

He then added: "I am concerned, however, about the conduct from some of the fourth estate in recent weeks. In a week when a Member of Parliament was physically assaulted, I fail to see how one headline on this issue 'The Noose Tightens' reflects legitimate scrutiny of public officials.

"I am sorry to my family for the toll this has taken on them."

At PMQs on Wednesday, the Labour leader Sir Keir Starmer claimed Mr Sunak was “too weak” to dismiss Mr Zahawi.

SNP Cabinet Office spokesperson Kirsty Blackman said: "Nadhim Zahawi should have been sacked well before now, but it has only been Rishi Sunak's dithering and indecision that has kept him in post.

"The Prime Minister shouldn't have needed an ethics advisor to tell him that a sitting Chancellor should not be in a tax dispute about millions of pounds of unpaid taxes.

"Sunak still has questions to answer over this whole affair about what he knew about the settlement and what advice he received about Zahawi's tax on his appointment.

"The UK government is riddled with sleaze and scandal and the only way Scotland can escape is by becoming an independent country."

Bridget Phillipson, Labour’s shadow education secretary, also said that Prime Minister should have sacked Mr Zahawi before now.

She said: “Nadhim Zahawi failed to pay the taxes he owed in this country and tried to silence those who spoke out about it.

“Despite the writing on the wall, the Prime Minister showed himself to be too weak to act.

"Rishi Sunak should have sacked Nadhim Zahawi a long time ago, just as he should have acted over Dominic Raab and Suella Braverman, but in his weakness he promoted them.

“The reason this keeps happening is we have a Government whose only principle is party first, country second.

"The Tories are governing in their own interests, with a Prime Minister who is trying to manage his MPs, rather than govern in the national interest.

“It’s vital that we now get answers to what Rishi Sunak knew and when did he know it? We need to see all the papers, not just have the Prime Minister’s role in this brushed under the carpet.”

The Liberal Democrats called on MrZahawi to resign as an MP.

Deputy leader Daisy Cooper said: “Rishi Sunak has finally acted after spending days defending the indefensible on Nadhim Zahawi.

“It should never have taken him this long to act. Sunak’s first 100 days in office have been tarnished by endless Conservative sleaze and scandals.

“Serious questions remain about what Sunak knew about Zahawi’s tax affairs when he appointed him. We need a proper independent inquiry to establish the facts and hold the Prime Minister to account.

“Given this was a serious breach of the ministerial code, Nadhim Zahawi must also do the right thing and resign as an MP.

"He has shown he is unfit to serve in Cabinet and unfit to serve the people of Stratford-on-Avon.”

Appearing on BBC's Sunday with Laura Kuenssberg as news of the sacking broke, Levelling Up Secretary Michael Gove said he was not aware of any other minister who will have to quit over wrongdoing, but that he could not “make windows into men’s souls, or women’s”.

Asked if he could guarantee that no other Government minister wpuld have to quit over any financial wrongdoing or issues with their tax affairs, Mr Gove said: “To the best of my knowledge I can’t think of anyone who would be in that position. I can’t make windows into men’s souls, or women’s.

"I can’t know that there isn’t someone anywhere in politics or elsewhere who might not have, through inadvertence or a desire to cut corners, done something wrong.

“All I would say is that in a properly, what’s the word, Christian sense, we should be ready to forgive as well as to judge.”

Scottish Green MSP Maggie Chapman said: “It is good that Zahawi has gone, but this isn't just about him. It's also about the judgement of the Prime Minister, who clearly has serious questions to answer over this whole affair.

“What did he know, when did he know it, and why has he dithered so long when it was clear Nadhim Zahawi had broken the ministerial code and the trust placed in him?

“This revolving door of scandal, borderline corruption and incompetence is spinning out of control. This Prime Minister, like the previous two before him, is now shrouded in controversy.

“He must explain his actions to the nation and stake what's left of his reputation on there being no more scandals hiding in the shadows of his cabinet.

“The Tories cannot be trusted. This rotten husk of a government must go, and go now.”

MSP Craig Hoy, the chair of the Scottish Conservatives, said Mr Sunak had made the "right decision" in getting rid of Mr Zahawi.

He told BBC Scotland's Sunday Show: "It was only right and proper that he asked Sir Laurie Magnus, his ethics adviser, to look into this issue, and so Laurie has come back and swiftly concluded that Nadhim has broken the Ministerial Code and the Prime Minister has then acted decisively in removing Mr Zahawi from office.

“I think the Prime Minister has done the right thing really.”

Pressed on why it took so long to act Mr Hoy said the sacking “hasn’t been hanging around for months” and that Mr Sunak acted “decisively”.

He also said the Prime Minister had insisted he was not aware of “those tax issues and his tax affairs” when he appointed Mr Zahawi to Government.