Wes Streeting demands investigation into Sajid Javid’s tax arrangements

Labour’s Wes Streeting has called for an investigation into the historic tax arrangements of Sajid Javid “due to the possibility that he has been a beneficiary of a loan scheme designed to avoid paying UK tax”.

In a letter to HMRC permanent secretary Jim Harra, the Shadow Health Secretary posed several questions relating to Javid’s ties to SA Capital, which is a company the minister co-owned with his brother and their respective wives.

The Health Secretary was director of the company for one day in May 2005. Streeting highlighted that, during that same year, loans amounting to nearly £1m were made to the firm and that just under half of the amount was raised from banks – leaving the source of the rest of this money unclear.

Labour’s health spokesperson warned that the purpose of the loans may have been to “provide a tax-efficient way for money held offshore to enter Britain” and that Javid could have avoided paying “hundreds of thousands of pounds” to HMRC.

Streeting asked the permanent secretary to disregard the usual time limit on such an investigation, asking Harra to “consider the public interest nature of this case and the need to demonstrate to the public that not even cabinet ministers are above the law when it comes to paying their taxes”.

A spokesperson for 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.”

The call from Streeting comes after a series of reports into the tax arrangements of the Health Secretary. Javid revealed earlier this year that he claimed non-domiciled status and had an offshore trust while he worked as a parliamentary private secretary in the Treasury.

Below is the full text of the letter.

Dear Mr Harra,

I am writing to ask you to conduct an investigation into the historic tax arrangements of the Secretary of State for Health and Social Care, Rt Hon Sajid Javid MP due to the possibility that he has been a beneficiary of a loan scheme designed to avoid paying UK tax.

The Secretary of State for Health and Social Care, Sajid Javid, recently admitted to taking advantage of non-dom status until 2012, including while he was a Treasury Parliamentary Private Secretary.

Recent details have come to light about the nature of this non-dom status, specifically the fact that Mr Javid co-owned a company called SA Capital, set up in 2003, with his brother and their respective wives.

Records show that he was director for a single day in May 2005, then giving up his and his wife’s shares. During that year SA Capital raised £996,000 in loans, though only £411,000 was secured from banks, leaving £585,000 unaccounted for. The 2005 accounts also show that £491,000 was lent to an unknown party.

These facts raise several questions in the public interest about Mr Javid’s tax affairs:

1. What was the source of the £585,000 loaned to SA Capital in 2005?
2. Who was the £491,000 lent to?
3. Were offshore trusts involved in either of those transactions?

Moreover, there is evidence that shows the unaccounted-for loans to SA capital rose to £795,00 and then, by the end of 2007 to £2m. Loans made by the company to unknown persons rose to £1m.

If the purpose of the loans were to provide a tax-efficient way for money held offshore to enter Britain, then Mr Javid potentially avoided paying hundreds of thousands of pounds to HMRC. I urge you to investigate this further to establish the facts of this case, and to ensure that the people of this nation are taxed fairly and equitably.

I am aware of the standard time-limit on these investigations, but would ask you to consider the public interest nature of this case and the need to demonstrate to the public that not even Cabinet ministers are above the law when it comes to paying their taxes. Would you consider an exemption to the time-limit if an individual were to self-refer for investigation?

Similarly, I want to enquire as to what procedures are in place to prevent political interference in any such matters.

Yours sincerely,

Wes Streeting MP
Shadow Secretary of State for Health and Social Care