Nadhim Zahawi has been sacked as Tory Party chairman and cabinet minister without portfolio by Rishi Sunak.
The prime minister said there had been “a serious breach of the ministerial code” over Zahawi’s tax affairs.
“As a result, I have informed you of my decision to remove you from your position in HM government,” Sunak said in a letter to his Tory colleague.
The PM has been under pressure to sack Zahawi ever since it emerged that he had paid a £5 million settlement to HMRC over unpaid tax when he was chancellor last year.
In a statement a week ago, Zahawi said that HMRC has agreed that it had been a “careless and not deliberate” mistake.
In his letter to Zahawi, the prime minister said: “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.
“As a result, I have informed you of my decision to remove you from your position in HM government.
″“As you leave, you should be extremely proud of your wide-ranging achievements in government over the last five years.
“In particular, your successful oversight of the Covid-19 vaccine procurement and deployment programme which ensured the United Kingdom was at the forefront of the global response to the coronavirus pandemic.”
Shadow education secretary Bridget Philipson said: “Despite the writing on the wall, the Prime Minister showed himself to be too weak to act.
“Rishi Sunak should have sacked Nadhim Zahawi a long time ago, just as he should have acted over Dominic Raab and Suella Braverman, but in his weakness he promoted them.
“The reason this keeps happening is we have a government whose only principle is party first, country second.
“The Tories are governing in their own interests, with a prime minister who is trying to manage his MPs, rather than govern in the national interest.”
Liberal Democrat deputy leader Daisy Cooper called on Zahawi to stand down as MP for Stratford-on-Avon.
She said: “Rishi Sunak has finally acted after spending days defending the indefensible on Nadhim Zahawi.
“It should never have taken him this long to act. Sunak’s first 100 days in office have been tarnished by endless Conservative sleaze and scandals.
“Serious questions remain about what Sunak knew about Zahawi’s tax affairs when he appointed him. We need a proper independent inquiry to establish the facts and hold the Prime Minister to account.
“Given this was a serious breach of the ministerial code, Nadhim Zahawi must also do the right thing and resign as an MP.”