Nadhim Zahawi has released a statement in order to address questions regarding his finances.
Labour had previously called for an explanation after it was reported that the former Chancellor paid HM Revenue & Customs a seven-figure sum to end a tax dispute.
It was further reported that part of that sum was a 30 per cent penalty, taking the total tax bill to more than £4.8million.
In a statement released on Saturday, Mr Zahawi said that following discssions with HMRC, it was concluded that it was a “careless and not deliberate” error.
Within his statement, the Tory party chairman said HMRC disagreed with the allercation of shares his father took when he set up YouGov.
"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.
"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."
Mr Zahawi said the matter was resolved and "all my tax affairs were up to date" when Prime Minister Rishi Sunak appointed him as party chairman.
Prior to his statement, Labour had called his position “untenable”, with deputy leader Angela Rayner telling BBC Breakfast: “When you're the Chancellor, who is in charge of the tax affairs of the UK, and you've got a wealth of that nature, you would be expected to know about your tax affairs or to seek that advice at the time as opposed to not paying those taxes and having to pay a penalty notice."
She added: "I believe his position is untenable. If he's lied and misled the public and HMRC regarding his tax affairs then I think his position is untenable."
Justice Secretary Dominic Raab, however, defended his colleague, saying that Mr Zahawi has paid “the tax that he's owed, that he's paid it on time, that there's nothing outstanding due”.
