Nadhim Zahawi says there was a "careless and not deliberate" error in his tax affairs that was accepted by HMRC.

The Conservative Party chairman said he wanted to address "confusion" about his finances following reports he avoided tax before having to pay it back.

The Labour party has called for the Stratford-upon-Avon MP to be sacked by Rishi Sunak after the Guardian reported he had to pay back the tax he owed plus 30 per cent - totalling £4.8 million.

Mr Zahawi said he had chosen to "settle the matter and pay what they said was due, which was the right thing to do".

Last weekend the Sun on Sunday reported that the former Chancellor was to pay back a seven-figure sum to HMRC after questions were raised about whether he used an offshore company to hold shares in YouGov.

A stake worth more than £20 million was reportedly held in his family trust, Gibraltar-registered Balshore Investments, until it was sold in 2018.

The former Chancellor, who also co-founded YouGov, has previously denied benefiting from the trust.

In the statement issued today (January 21), Mr Zahawi said: "As a senior politician I know that scrutiny and propriety are important parts of public life. Twenty-two years ago I co-founded a company called YouGov. I'm incredibly proud of what we achieved. It is an amazing business that has employed thousands of people and provides a world-beating service.

"When we set it up, I didn't have the money or the expertise to go it alone. So I asked my father to help. In the process, he took founder shares in the business in exchange for some capital and his invaluable guidance.

"Twenty one years later, when I was being appointed chancellor of the exchequer, questions were being raised about my tax affairs. I discussed this with the Cabinet Office at the time.

"Following discussions with HMRC, they agreed that my father was entitled to founder shares in YouGov, though they disagreed about the exact allocation. They concluded that this was a 'careless and not deliberate' error.

"So that I could focus on my life as a public servant, I chose to settle the matter and pay what they said was due, which was the right thing to do."

But with Mr Zahawi's still not saying how much has been paid, Labour said there were still questions to be answered.

The party said he should publish all correspondence with HMRC "so we can get the full picture".

In his statement, Mr Zahawi added: "Additionally, HMRC agreed with my accountants that I have never set up an offshore structure, including Balshore Investments, and that I am not the beneficiary of Balshore Investments.

"This matter was resolved prior to my appointments as chancellor of the duchy of Lancaster and subsequently chairman of the party I love so much. When I was appointed by the prime minister, all my tax affairs were up to date."