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Tory donor ‘fraud firm’ protected from raids

HMRC refuses French request to investigate Lycamobile

CHANCELLOR Philip Hammond has serious questions to answer about HMRC “stonewalling” French requests to inspect the Tories’ biggest corporate donor over money laundering and tax fraud allegations, Labour said today.

The revenue told French tax officers it would not seek a search warrant for the London headquarters of telecoms company Lycamobile, which donated more than £2 million to the Tories up until 2016.

The transnational also gave more than £1 million to the Prince Charles Trust, according to a BuzzFeed investigation reported today.

An HMRC email to the French government explaining that it would not probe the matter actively cites the fact that Lycamobile is the Tories’ biggest corporate donor.

The missive also notes: “[Lycamobile 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.”

Shadow chancellor John McDonnell called on Mr Hammond to immediately explain the behaviour of HMRC and ensure that there “was no undue pressure exerted by Conservative Party politicians or officials.”

He also 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.”

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.”

The Commons Treasury committee announced today that it will examine why the government refused to help the French authorities.

Labour MP Meg Hillier, chair of spending watchdog the public accounts committee, is also planning to grill HMRC civil servants when they appear before the Commons committee this month.

French prosecutors launched their investigation into Lycamobile two years ago and have arrested 19 people accused of using its accounts to launder money from organised criminal networks.

BuzzFeed has reported that men deployed by Lycamobile with rucksacks full of cash had been secretly filmed depositing £250,000 at a time at post offices.

These daily cash deposits by the bagmen were taking place while Tories were accepting company donations.

An HMRC spokesman said the organisation acted correctly as there were not enough details given by the French authorities to satisfy the legal requirements to secure a search warrant.

He added: “After the French request was rejected, HMRC continued to liaise with the French authorities to explain the statutory requirements for a UK search warrant and offered to meet the French judge face-to-face to explain those requirements.”

HMRC sources said facts about political donations were contained in the correspondence as “background information.”

Prime Minister Theresa May’s spokesman told a Westminster briefing that HMRC “never takes political donations into account” when deciding whether or not to investigate a company.

A Conservative Party spokesman said: “All donations to the Conservative Party are properly and transparently declared to the Electoral Commission, published by them, and comply fully with the law.”

Tory sources said the party decided to stop taking donations from Lycamobile nearly two years ago and has not received any since July 2016.


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