Treasury Committee to examine why HMRC refused to assist French probe into Lycamobile

According to the Electoral Commission’s donation database, the company frequently donated to the Conservatives until 2016 and in that year alone handed the party over £600,000 in cash and auction prizes

A spokesperson for HMRC said the email was 'regrettable' (Getty)

The Commons Treasury Committee is to examine why HM Revenue and Customs refused to assist French authorities with a financial probe into a company that had donated considerable sums of money to the Conservative party.

It comes after an investigation by Buzzfeed showed that an email sent from HMRC officials mentioned how the telecoms giant Lycamobile was a donor to Theresa May’s party and the Prince Charles Trust and would be “extremely unlikely” to agree to having their premises searched.

Correspondence published by the website revealed that French authorities had requested last year that their British counterparts raid Lycamobile’s headquarters in London but this was rejected.

An email from HMRC also noted: “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 1.25bn euros to the Prince Charles Trust in 2015.”

Nicky Morgan, the Conservative MP who chairs the Treasury Select Committee, said: “This clearly raises all sorts of questions and is completely inappropriate.

“I would expect the committee to look into this as part of our economic crime review and to have some early questions for HMRC about the correspondence that they sent.”

Labour immediately demanded that Philip Hammond, the Chancellor, ensured that there was “no undue pressure exerted” by party officials.

A spokesperson for HMRC said the email was “regrettable” but insisted the organisation always investigates suspected rule breaking objectively and “is never influenced by political considerations”.

Referring to decision not to search the company’s offices, they added: “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, and offered to meet the French judge face to face to explain those requirements.”

They added: “The facts speak for themselves: last year alone we secured an additional £8bn in tax from the largest businesses by tackling avoidance, evasion and non-compliance.”

Responding to the report, John McDonnell, the shadow chancellor, added: “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 mater, 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 officials.”

A spokesperson for the Tories 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.”

Lycamobile said: “Lycamobile has not contributed to the Conservative Party since July 2016. Lycamobile continue to deny all allegations being implied by BuzzFeed.”