Why DID the taxman block probe into firm that gave Tories £2m?

‘Deeply concerning revelations’

THE UK taxman refused to help with a money laundering probe into a telecoms firm that had been a major Tory donor. HM Revenue and Customs rejected a request from French police to raid the London offices of Lycamobile.

Tax officials told the French the company was the ‘biggest corporate donor to the Conservative party’.

French prosecutors are investigating Lycamobile over a suspected £13.4million money laundering ring as well as VAT fraud.

Nineteen people were arrested in France in June 2016 over the allegations. An HMRC spokesman yester- day insisted the request, made last year, was turned down purely because there was not enough evidence to get a warrant from a judge.

Lycamobile has donated more than £2.1million to the Conservatives since 2011 but the party stopped accepting its donations in 2016.

According to news website BuzzFeed, an HMRC official emailed the French investigators in March 2017.

The message said: ‘Lycamobile are a large multinational company with 2015 revenue recorded as 1.6bn Euros. They have significant resources at their disposal and are extremely unlikely to agree to having their premises searched without instructing their own lawyers to look at any search warrant in detail.

‘It is of note that they are the biggest corporate donor to the Conservative party led by Prime Minister Theresa May and donated 1.25m Euros to the Prince Charles Trust in 2012.’

The trust referred to is actually the British Asian Trust, which was set up by the Prince in 2007. The Prince’s Trust has never received money from Lycamobile.

Shadow chancellor John McDonnell said: ‘If true, these are deeply concerning revelations.

‘The fact that a Tory donor could be allowed to potentially subvert the system will look bad to taxpayers who play by the rules.

‘The Tories have serious questions to answer on this matter, and I hope the Chancellor immediately comes forward to explain this behaviour by HMRC and ensure there was no undue pressure exerted by Conservative Party politicians or officials.’

Labour leader Jeremy Corbyn said: ‘HMRC is a Government agency, it is part of our Government and it should investigate every company without fear and without favour about its tax affairs, to make sure they pay the correct amount of tax – and there’s no hiding place, no evasion from it, whoever they are.’

HMRC told BuzzFeed the reference to the donations was ‘ regrettable’, but insisted it had acted correctly.

A spokesman said: ‘The application contained insufficient detail to satisfy the legal requirements to secure a warrant. After the French request was rejected, HMRC continued to liaise with the French authorities to explain the statutory requirements for a UK search warrant... HMRC always investigates suspected rule breaking professionally and objectively.’

Lycamobile has denied any involvement in money laundering.