Nicky Morgan has demanded HM Revenue and Customs chief executive Jon Thompson respond to concerns about the tax agency’s refusal to assist with a French investigation into telecoms giant Lycamobile last year.
The Treasury Select Committee chair wrote to Thompson on Monday after an HMRC email leaked to Buzzfeed appeared to imply that this decision was influenced by Lycamobile’s status as the “biggest corporate donor to the Conservative party”.
Morgan, a Conservative MP, said she was demanding answers because the email “clearly raised all sorts of disturbing questions, including HMRC’s approach to international cooperation in the fight against economic crime”.
She added: “It’s also concerning that, as implied in the leaked email, HMRC’s actions against those suspected of economic crime may be influenced by their political donations or high-profile connections.”
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The correspondence, in which tax officials rebuffed a request from French authorities to raid the offices of Lycamobile for suspected money laundering, described the firm as the “biggest corporate donor to the Conservative party led by prime minister Theresa May [which had also] donated 1.25m euros to the Prince Charles Trust in 2012”.
It also noted that Lycamobile was a huge company with “large assets at their disposal”, which would be unlikely to agree to a raid and might respond with a legal challenge.
An HMRC spokesperson said the details were only included as background information about the firm, but conceded that they were open to interpretation and should not have been included.
"We never take political donations into account when working out how to work with other countries, or indeed on our own, in enforcing the tax law,” they said.
In her letter to Thompson, Morgan wrote: “Given the importance of international cooperation on the fight against economic crime, it is extremely troubling to see press reports that HMRC refused to help another country pursue its investigations into money laundering and tax fraud.”
She called for a response to four concerns, about:
- HMRC’s willingness and capacity to act vigorously on behalf of other countries and to adopt a constructive and proactive approach to requests for UK assistance in investigating economic crime
- HMRC’s readiness to undertake their own investigations where there are serious allegations of money laundering and tax fraud
- The implication in the leaked email that HMRC’s actions against those suspected of economic crime are influenced by political donations made by suspects, or by high profile connections that they might have
- The security of HMRC information about the investigation of possible criminal activity provided in strict confidence by another country’s law enforcement agency
Morgan said the committee will address the incident in its ongoing inquiries into economic crime and tax avoidance.
An HMRC spokesperson said: “HMRC always investigates suspected rule breaking professionally and objectively and is never influenced by political considerations. 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.
“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.”