Rishi Sunak has been urged by Labour to “come clean” over what he knew about Nadhim Zahawi’s tax affairs after the PM sacked the Tory party chairman on Sunday.

An ethics inquiry into the handling of Mr Zahawi’s finances found a “serious breach” of the ministerial code and Mr Sunak swiftly removed the Tory chairman from his position.

But the PM remains under pressure to outline what he knew about the investigation into Mr Zahawi’s tax affairs and when.

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Labour’s deputy leader Angela Rayner and chairwoman Anneliese Dodds have written to Mr Sunak asking him to give the public “full transparency”.

The letter includes a range of questions for the prime minister to answer:

• When he was made aware of the HMRC investigation into Zahawi’s tax affairs and if he knew the former Party Chair had agreed a multi-million pound settlement with the taxman

• Why he previously stated at PMQs that all questions on this issue had been answered

• What discussions he had with Zahawi before appointing him to his cabinet

• When he will keep his promise to publish his own tax return for the 2022/23 tax year

• If any Conservative ministers had failed to submit their declaration of interests, and when the next register would be published.

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2:13

What is going on with Zahawi’s taxes?

Ms Dodds described Mr Sunak as “weak” for not sacking Mr Zahawi “when this murky affair first surfaced”.

“Rishi Sunak has eventually relented to pressure and sacked Nadhim Zahawi,” she said.

“This doesn’t change the fact that his government is drowning in sleaze, with whole rogues’ gallery of ministers being investigated for security breaches, bullying allegations and murky tax affairs.

“We need to know precisely what Rishi Sunak knew about Zahawi’s tax affairs and the HMRC investigation, why he was appointed to the cabinet in the first place, and when the prime minister will be transparent about his own tax return.”

Ms Rayner added: “This hopelessly weak prime minister has been dragged kicking and screaming into doing what he should have done long ago.

“Rishi Sunak shouldn’t have needed an ethics adviser to tell him that Nadhim Zahawi’s position was untenable, but instead he continued to prop up the man he appointed to cabinet.

“He must now come clean on the advice he was given about that appointment in the first place and why he apparently ignored the warnings.”

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4:47

Nadhim Zahawi’s life in politics

Mr Sunak had resisted earlier calls from opposition parties to sack Mr Zahawi as Tory party chairman following reports that he had paid a penalty as part of an estimated £4.8m settlement dispute with HMRC.

He had instead asked his new ethics adviser – Sir Laurie Magnus – to assess whether the settlement amounted to a breach of the ministerial code.

In a letter written by Sir Laurie to the PM on Sunday morning following the conclusion of the investigation, the ethics adviser said Mr Zahawi had “shown insufficient regard for the general principles of the ministerial code” and had 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 the “omissions” by Mr Zahawi regarding his tax affairs “constitute a serious failure to meet the standards set out in the ministerial code”.

In a second letter written by the PM to Mr Zahawi following Sir Laurie’s findings, Mr Sunak said it is “clear that there has been a serious breach of the ministerial code” and announced the removal of the Tory chairman from his ministerial position.

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1:37

Nadhim Zahawi has been sacked

Informing Mr Zahawi of his decision to remove him from government, Mr Sunak wrote: “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.”

Read more:
Who is Nadhim Zahawi? The politician sacked over his tax affairs?
Rishi Sunak: From Zahawi and Raab to seatbelt gaffe – the U-turns and scandals of his first months as PM

The row surrounding Mr Zahawi had centred on a tax bill over the sale of shares in YouGov – the polling firm he founded worth an estimated £27m – which were held by Balshore Investments, a company registered offshore in Gibraltar and linked to Mr Zahawi’s family.

Mr Zahawi had insisted he was “confident” he had “acted properly throughout”.

In a statement on Sunday morning, the Lib Dems said Mr Zahawi should also step down from his role as an MP as he is “unfit to serve the people of Stratford-upon-Avon”.

But in a letter to Mr Sunak following his sacking – in which he made no apology for his actions – Mr Zahawi told the PM he can be “assured of my support from the backbenches in the coming years”.

Speaking shortly after Mr Zahawi’s sacking, Levelling Up Secretary Michael Gove told reporters Mr Sunak had taken “decisive action” following the publication of Sir Laurie’s report.