The leadership candidate claimed he was the victim of a “smear” campaign – but promised to “answer any questions HMRC have about me” and publish his accounts annually if he succeeds Boris Johnson in No 10. Conservative leadership candidates Sajid Javid and Jeremy Hunt have also pledged to open their tax affairs if they make it to the final stage of the Tory leadership race. Mr Javid said he had “no problem” with tax transparency and pointed out it had “never been investigated” in an apparent attack on his rival. Hinting that political enemies were trying to thwart his bid to become prime minister, Mr Zahawi told Sky News on Sunday he was not aware of an investigation. “So I was clearly being smeared. I’ve been told that the Serious Fraud Office, that the National Crime Agency, that HMRC is looking into me,” he said, adding: “I wasn’t aware of that, I’ve always paid my taxes, I’ve declared my taxes in the UK.” Promising to co-operate with the authorities, Mr Zahawi added: “I will answer any questions HMRC have about me.” The chancellor added: “But I will go further. I will pledge today that, if I am Prime Minister, I think the right thing to do is to publish my accounts annually.” The Independent revealed that Mr Zahawi’s finances had been investigated by the National Crime Agency in 2020. Investigations were also carried out by the Serious Fraud Office before the investigation passed to HMRC, which falls under the department Mr Zahawi now heads. A senior Whitehall source, The Independent revealed on Saturday, confirmed that the tax investigation is currently “unresolved”. The Independent also revealed that Boris Johnson, Home Secretary Priti Patel and the Cabinet Office have been briefed on the investigations. The Observer reported separately that the Cabinet Office’s fitness and ethics team alerted Boris Johnson to an HMRC “flag” about Mr Zahawi’s finances before he was promoted. In a statement on Sunday night, Mr Zahawi said: “There has been news in recent days that is inaccurate, unfair and clearly defamatory.” He added: “These slanderers falsely claimed that the Serious Fraud Office, the National Crime Agency and HMRC were investigating me. Let me be absolutely clear. I don’t know that. I was not told this was the case. “I have always declared my financial interests and paid my taxes in the UK. If there are any questions, of course I will answer any questions HMRC have for me.” Earlier on Sunday, Javid, who resigned from Johnson’s government earlier this week, told the BBC he believed the two finalists for the leadership should be “quite open” about their tax affairs. He also sought to defend his own use of the offshore tax regime, which allowed him to avoid paying UK tax on his overseas income, before entering politics. It emerged earlier this year that the former health secretary enjoyed offshore tax status in the early 2000s when he worked for Deutsche Bank. Asked how long he had been taking advantage of such arrangements, Mr Javid told the BBC’s Sunday Morning programme: “I think for about four or five years, before public life, it was the 2000s.” The former cabinet minister, who is believed to qualify for the scheme because his father was born in Pakistan, said: “I had a job that was very international … so my tax affairs were very international.” The Independent first revealed in April that the wife of then chancellor Rishi Sunak avoided UK tax on her overseas income through her non-resident status. Mr Hunt said neither he nor his wife had ever benefited from non-domicile tax status – swapping himself for both Mr Sunak and Mr Javid. “I’m more than happy, if I get to the bottom two, to publish my tax affairs if that’s what both candidates do,” Mr Hunt said. “I’m not going to speak for other candidates, but for myself I wouldn’t have any problem with it.” It comes as Tory leadership candidates race to outdo each other on tax cuts. Foreign Secretary Liz Truss is poised to join the fray on Monday with a pledge to reverse Mr Sunak’s rise in national insurance. Mr Javid claimed his plans for tax cuts of £39bn a year, including reversing the rise in national insurance, would be fully funded. He promised to lay out the details in a “scorecard” in the coming days. Responding to Mr Javid and Mr Hunt’s plans to cut corporation tax to 15%, Torsten Bell, chief executive of the Resolution Foundation think tank, said: “This is crazy. We’re talking about £30 billion. This will be an expensive leadership election.”
