Nadhim Zahawi has been sacked as Tory party chairman after paying a penalty to resolve a multimillion-pound tax dispute while he was chancellor.
In a letter to Mr Zahawi published on Sunday morning, Prime Minister Rishi Sunak said it is “clear that there has been a serious breach of the Ministerial Code”.
Mr Zahawi had faced pressure in recent days to quit as questions swirled about his finances even after he released a statement to “clear up some of the confusion”.
He admitted he paid what HM Revenue & Customs said “was due” after it “disagreed about the exact allocation” of shares in the YouGov polling company he co-founded, an error he said was “careless” not deliberate.
But he has not disclosed the size of the settlement – reported to be an estimated £4.8m including a 30% penalty – or whether he paid a fine.
Mr Sunak had resisted earlier calls from opposition parties to sack Mr Zahawi and instead asked his new ethics adviser – Sir Laurie Magnus – to assess whether the HMRC settlement amounted to a breach of the ministerial code.
But in a letter written by Sir Laurie to the PM this morning, the ethics adviser concluded that Mr Zahawi “has shown insufficient regard for the general principles of the Ministerial Code” and has not fulfilled the requirements of being an “honest, open and an exemplary leader”.
In the correspondence to Mr Sunak released by Downing Street, Sir Laurie said his overall judgement was that “Mr Zahawi’s conduct as a minister has fallen below the high standards that, as prime minister, you rightly expect from those who serve in your government”.
In a second letter written by the prime minister to Mr Zahawi, Mr Sunak informs the Tory party chairman of his subsequent decision to remove him from his ministerial post following Sir Laurie’s findings.
“When I became prime minister last year, I pledged that the government I lead would have integrity, professionalism and accountability at every level.
“That is why, following new information which came to light in recent days regarding your personal financial arrangements and declarations, I asked Sir Laurie Magnus, the Independent Adviser on Ministers’ Interests, to fully investigate this matter.
“You agreed and undertook to cooperate fully with the inquiry.
“Following the completion of the independent adviser’s investigation – the findings of which he has shared with us both – it is clear that there has been a serious breach of the Ministerial Code.
“As a result, I have informed you of my decision to remove you from your position in His Majesty’s Government.”
The PM added that Mr Zahawi should be “extremely proud” of his “wide-ranging achievements in government over the last five years”, particularly crediting his “successful oversight of the COVID-19 vaccine procurement and deployment programme”.
Labour, the Lib Dems and a former Tory minister had publicly called for him to go.
Caroline Nokes earlier this week said there were “too many unanswered questions” over the former chancellor’s actions and that he was “leading too many front pages”.