NADHIM Zahawi has been sacked by Rishi Sunak.
The Prime Minister told the Tory chairman in a letter that it is “clear that there has been a serious breach of the Ministerial Code”.
He wrote: "When I became Prime Minister last year, I pledged that the Government I lead would have integrity, professionalism and accountability at every level.
"That is why, following new information which came to light in recent days regarding your personal financial arrangements and declarations, I asked Sir Laurie Magnus, the independent adviser on ministers' interests, to fully investigate this matter.
"You agreed and undertook to co-operate fully with the inquiry.
"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.
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"As a result, I have informed you of my decision to remove you from your position in His Majesty's Government."
Mr Zahawi, 55, was engulfed in a row over his taxes while he was Chancellor.
He was hit with a £4.8million bill from HMRC – including a penalty of more than a million over his offshore tax arrangements.
It was one of the highest payouts agreed by tax officials last year.
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A source said: "In any given year £1m would be a big sum for basic tax avoidance by an individual.
"Most amounts tend to be in the £100,000s so almost £5m is an extraordinary amount."
The PM and his Government had faced questions for several days about the dispute, with growing pressure on Mr Zahawi to stand aside.
He was blocked from getting a knighthood in the New Year’s honours list after Whitehall officials contacted counterparts at the HMRC.
Mr Zahawi insisted that any tax mistakes were "careless and not deliberate error".
The row centres on the tax bill following the sale of shares in YouGov, the firm he founded, worth an estimated £27m.
Speaking shortly after Mr Sunak's swift decision, which came following reports he was "livid" with his Cabinet colleague for failing to mention paying the tax penalty when he was appointed in October, Michael Gove said it shouldn't define Government.
The Levelling Up Secretary said "because someone commits a lapse or a sin, that shouldn't be automatically taken as an opportunity to damn an entire organisation or a way of working".
He was questioned on the BBC's Sunday With Laura Kuenssberg programme about the departure his colleague's departure.
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Asked about a number of Tory politicians "trying to follow their own set of rules", Mr Gove said: "There are always people who will fall short, whether it's in politics or other parts of public life, or professional life, or in any area."
The PM is unlikely to appoint a new Conservative chairman by the end of Sunday, it is understood.
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