Sajid Javid has dismissed allegations he potentially avoided paying hundreds of thousands of pounds in British tax before entering politics as “typical smear attacks” from Labour.

Shadow health secretary Wes Streeting has called for an investigation into Mr Javid’s historic tax arrangements, claiming there is a possibility he was “a beneficiary of a loan scheme designed to avoid paying UK tax”.

Labour said the Health Secretary previously co-owned a company called SA Capital, set up in 2003, with his brother and their respective wives.

Records show he was director for a day in May 2005, before giving up his and his wife’s shares, the party claimed.

During that year, Labour said SA Capital raised nearly £1 million in loans, though only £411,000 was secured from banks, leaving £585,000 unaccounted for.

In a letter to HMRC calling for an investigation, Mr Streeting raised a number of questions about the arrangements.

He said if the purpose of the loans was “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,” he wrote.

But Mr Javid told Sky News: “This is typical Labour, you know, personal attacks on people. And this is what Labour does when they have got nothing to say about the real issues, the issues at hand.

“This is just typical smear attacks by Labour and it’s nothing more.”

Asked if had avoided paying hundreds of thousands of pounds in tax before he got into politics, he said: “No, of course not.”

He accused Labour of “making things up” so they can “launch personal attacks”.

“I’ve been very clear about my own tax affairs, my tax status, my residences, when I’ve worked in the UK, when I’ve worked abroad, I’ve been very clear and open about that and at all times I’ve been clear that all rules of course have always been followed,” he said.

“What you’re referring to in this letter is … just a typical sort of Labour smear campaign where they don’t have any evidence of anything and they’re just making things up so that they can launch personal attacks. That’s all it is.”

Pressed on whether there is any truth in the allegation the loans could have provided a tax-efficient way for money held offshore to enter the UK, he said: “No, what I’ve been clear about and as I’ve said, I’ve been very open about all of this … is that some 20 years ago, did I invest in my brother’s business to help him start a new business? Of course I did. And I don’t think there’s anything wrong with that.

“I think that’s something that many people will do to help out their siblings or loved ones in starting their own business or their enterprise. And that’s all there is to this. That’s all there is.”