Nadhim Zahawi gives HMRC approval to speak to investigation into his tax affairs – as it happened

Tory chairman announces decision amid continued row over his tax affairs. This live blog is now closed

The former chancellor Philip Hammond has said he would not have accepted the job if he had been involved in an HMRC investigation.

Asked by Sky News if it was acceptable" that Nadhim Zahawi paid an HMRC penalty to settle a tax dispute while in charge of the Treasury, Hammond said:

My own personal view is that I would not want to accept the office of chancellor if I was at that time involved in a live negotiation of an outstanding tax case with HMRC.

If he was aware of these issues, then I think the question falls at his door. Why did he appoint somebody to this role who clearly was not in a position to carry out that function?"

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.