Labour calls for HMRC investigation of Sajid Javid’s tax affairs

Labour has called on tax authorities to investigate the financial affairs of the health secretary, Sajid Javid, The Independent has learned.

The party has penned a letter to HMRC requesting a fresh examination of the cabinet minister’s historic tax arrangements.

It centres on Mr Javid’s ties to a company called SA Capital. These links raise the “possibility that he has been a beneficiary of a loan scheme designed to avoid paying UK tax”, said the shadow health secretary, Wes Streeting.

A spokesperson for Mr Javid said the request for an investigation was a “smear attempt” by the Labour Party.

It comes after a series of reports on Mr Javid’s financial status. The health secretary used non-domicile status on his tax return – on what is called a remittance basis – up to 2009. He retained an offshore trust even while he worked as a parliamentary private secretary in the Treasury, until he became a government minister in 2012

He also disclosed his own use of non-dom status after The Independent revealed Rishi Sunak’s wife, Akshata Murty, had also elected to use the mechanism for tax purposes.

Labour’s letter poses a host of questions over the health secretary’s ties to SA Capital, which he co-owned with his brother and their respective wives.

Mr Javid was director of the company for one day in May 2005. During that same year, 2005, sizeable loans amounting to nearly £1m were made to the firm, Labour said. The loan arrangement has previously been reported by Private Eye magazine.

Only just under half of this amount was raised from banks, leaving the source of the rest of this money unclear, Labour said.

A source close to the health secretary said Mr Javid never received any financial benefit from the arrangement. Mr Javid had decided there was a risk the directorship was not compatible with “corporate leadership roles”, the source added.

However, Labour said there was a possibility that the “purpose of the loans were to provide a tax-efficient way for money held offshore to enter Britain” and that Mr Javid “potentially avoided paying hundreds of thousands of pounds to HMRC”.

It has asked HMRC to overlook time limits for investigations into historic tax affairs given the public interest in how cabinet ministers manage their finances. Senior politicians should not be “above the law when it comes to paying their taxes,” the letter said.

It also asked the tax body if it would consider an exemption to the time-limit if “an individual were to self-refer for investigation”.

A spokesperson for Mr Javid said: “This is a truly desperate smear attempt by Starmer’s Labour Party. The health secretary has been open and transparent about his previous tax statuses and residencies whilst in the UK and working abroad.

“Nearly two decades ago, and many years before entering public life, he helped his brother start a business by investing in it,” the spokesperson added.

This article was amended on 8 June 2022 to clarify the precise date on which Mr Javid stopped using non-domicile status on a remittance basis.