Mr Zahawi, who was appointed as party chairman in October, had been facing damaging reports that he had settled an estimated £4.8 million bill with HM Revenue & Customs while he was chancellor, including paying a penalty.
Mr Sunak initially resisted calls to sack his party colleague immediately and instead stressed the need for “due process”. But the report by Sir Laurie, the Prime Minister’s independent adviser on ministers’ interests, was published only six days later, and allies of Mr Zahawi suggested on Sunday that the conclusions had been rushed amid pressure on Mr Sunak to appear decisive.
In his report, Sir Laurie said Mr Zahawi had been guilty of repeated “omissions”, citing his failure to update his register of interests until more than a year after HMRC started looking into his taxes. When Mr Zahawi reached a settlement with the taxman in August 2022, this too should have been declared, Sir Laurie said.
“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,” he wrote.
In a letter published on Sunday morning, Mr Sunak told Mr Zahawi that he believed he had committed a “serious breach of the Ministerial Code”, adding: “As a result, I have informed you of my decision to remove you from your position in His Majesty’s Government.”
Mr Zahawi is furious about the decision to sack him, and is considering issuing a formal response to Sir Laurie’s report, The Times reported.