Nadhim Zahawi dealt massive blow in his £5m tax dispute as HMRC boss launches extraordinary intervention

NADHIM Zahawi came under further fire today as Britain’s chief taxman said people don’t pay penalties for “innocent errors”. 

The embattled Tory chairman’s position drew fresh scrutiny after HMRC boss Jim Harra's remarks to MPs.

It comes as Rishi Sunak tries to get a grip on mounting sleaze scandals damaging his drive to project a government of "integrity and accountability". 

Today the PM is hosting a Cabinet away day at his grace and favour Chequers estate.

Ministers will wargame strategies for the next general election while in Westminster calls to drop Mr Zahawi from the top table grow louder.

The Tory Chair was hit with a £4.8 million bill from HMRC while serving as Chancellor last year - including a penalty of more than a million over his offshore tax arrangements.

He is facing a probe by the Downing St sleaze-buster after the PM said there were “questions to answer”.

Today Mr Harra told MPs there are “no penalties for innocent errors”.

Stressing he was not speaking about any individual taxpayer, but more broadly, he told the Commons Public Accounts Committee: “Carelessness is a concept in tax law.

"It can be relevant to how many back years that we can assess, can be relevant to whether someone is liable to a penalty and if so, what penalty they will be liable to for an error in their tax affairs.

"There are no penalties for innocent errors in your tax affairs. So if you take reasonable care, but nevertheless make a mistake, whilst you will be liable for the tax and for interest if it's paid late, you would not be liable for a penalty.

"But if your error was as a result of carelessness, then legislation says that a penalty could apply in those circumstances.

After The Sun on Sunday revealed Mr Zahawi’s tax settlement over the interest gained in YouGov shares, he did not tell Mr Sunak that he had paid a penalty.

The PM is said to be “livid” that the Tory chairman withheld the information and he was forced to find out in the press.

But publicly he's insisted that Mr Zahawi should stay in the job until the sleaze investigation is complete.

At PMQs yesterday Mr Sunak said: "I believe in proper due process, that's why I appointed an independent advisor.

"I obviously can't prejudge the outcome of that, but it is right. It is right that we fully investigate this matter and establish all of the facts."