Nadhim Zahawi has said he is “clearly being smeared” after questions were reportedly raised about his personal finances before his appointment as chancellor.

The former education secretary and vaccines minister, who is vying to take over from Boris Johnson, told Sky News he had “always” paid his taxes and had “declared” them in the UK.

Should he become prime minister he will publish his accounts annually, he pledged.

According to The Observer newspaper, a “flag” was raised by officials before Mr Zahawi was made chancellor on Tuesday.

The 55-year-old replaced Rishi Sunak, who had quit earlier that evening and suggested in his resignation letter that Mr Johnson’s government was not being conducted “properly, competently and seriously”.

Civil servants in the Cabinet Office’s propriety and ethics team alerted the prime minister to an HM Revenue and Customs “flag” over Mr Zahawi before his appointment, the Observer reported.

Mr Johnson went ahead with the appointment “despite the possible concerns over his tax affairs”, it said.

A source told the newspaper such matters could “stop someone receiving an MBE or OBE” and that the “idea he could be chancellor or even prime minister is unbelievable”.

Another report, in The Independent, said Mr Zahawi’s finances were “secretly investigated” by the National Crime Agency.

The investigation did not lead to any action and there has been no suggestion of wrongdoing.

Speaking to Sky News presenter Kay Burley, Mr Zahawi said he had been unaware of the allegations.

“So I was clearly being smeared. I was being told that the Serious Fraud Office, that the National Crime Agency, that HMRC are looking into me,” he said.

“I was not aware of this, I have always paid my taxes, I have declared my taxes in the UK.”

Referring to a possible investigation, Mr Zahawi added: “I will answer any questions that HMRC has of me.

“But I will go further: I am going to make a commitment today that if I am prime minister I am going to publish my accounts annually.”

Mr Zahawi, who co-founded the polling company YouGov, is said to be worth more than £100m.

He is one of nine Conservative MPs who have declared that they are running for the party leadership so far.

Born in Iraq, he has said he “came here aged 11 without a word of English”.

He added in his initial bid to become PM: “The Conservative Party has made me who I am today.

“It gave me an education, it provided my family with a home and, most importantly, it provided hope.”

He is promising tax cuts and education reforms if successful.

Watch Nadhim Zahawi’s full interview with Kay Burley at 7am on Monday

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