There are “question marks” surrounding the validity of Sajid Javid’s claim of “non-Dom” status, according to tax experts.
The Health Secretary previously told the Sunday Times that he was holding on Non-Resident Status for six years between 2000 and 2006, which would mean he would not have to pay UK tax on his overseas income.
He said he was entitled to do so because his father was born in Pakistan and said he relinquished that status in 2009 before he was elected to Parliament.
However, this is just one of several tests a person must pass in order to claim the tax benefit.
Non-Dom status individuals are those who live in the UK and are tax resident here but have their permanent residence outside the country.
Usually, their residence will be the country their father considered their permanent homeland when they were born and to which they wish to return later.
You will need to prove to HM Revenue and Customs (HMRC) that you are resident in another country.
Tax experts said that for Mr Javid’s claim to be valid, his father had to have been a resident of Pakistan at the time of the health minister’s birth.
Ray McCann, a tax adviser and former HMRC inspector, told Sky News that only the very wealthy typically realize they can claim Non-Dom status to save on taxes.
He said he would have been “amazed” if Mr Javid’s father had claimed so, given how much has been said about his humble background.
He said it was difficult to know the circumstances without the health secretary sharing the information, but there were some areas that were “not beyond a reasonable doubt”.
“There are some question marks,” he said.
Dan Neidle, former chief tax officer at law firm Clifford Chance, also said he found it “surprising” that Javid’s father had Non-Dom status at birth.
“For most immigrants in this country there comes a point where it becomes clear that they will not return and at that point they acquire a place of choice, which is Britain,” he told Sky News.
He said it did not seem “particularly credible” that Mr Sajid could claim his long-term future was not in the UK as he has lived in the country for most of his life.
“It looks like a pretty surprising and racy position,” he said, adding that “we can’t be sure without seeing the facts.”
Nimesh Shah, chief executive of auditing firm Blick Rothenberg, also questioned whether Mr Javid had sufficient personal ties to another country to justify the claim.
“This is where my skepticism comes in: Sajid Javid has lived in the UK pretty much all his life,” he said.
In 2006, Mr Javid moved to Singapore and was therefore no longer a tax resident, which changed when he returned in 2009, saying he “proactively chose” to relinquish his Non-Dom status.
Mr Shah pointed out that in 2009 the Government introduced a £30,000 fee for those claiming Non-Dom tax status, which was previously free.
“It seems unduly coincidental that he decided to declare himself now resident in the UK around the same year or around the same time that the government introduced this flat fee,” he said, adding that there was a “small Split” appeared to be how Mr. Javid formulated the decision.
Mr McCann said that from his perspective as a former HMRC inspector, Mr Sajid’s case seemed “borderline” by today’s standards, but at the time such claims were less closely investigated.
He believes the health minister could have used his time in Singapore and trips to the US as an investment banker to express “uncertainty” about where he would spend the rest of his life and that could have been enough.
Mr Javid declined to comment.
Sajid Javid: ‘Question mark’ over Health Secretary’s claim for non-Dom status, tax experts say | business news
Source link Sajid Javid: ‘Question mark’ over Health Secretary’s claim for non-Dom status, tax experts say | business news