Lycamobile, a telecoms company with ties to the Conservative party, is facing a winding-up petition from HM Revenue and Customs over a long-running VAT dispute. Despite generating over £145m in revenue, the company is now loss-making and has faced numerous financial issues and concerns over the opacity of its books. The dispute with HMRC involves £51m, which could potentially cost the company £99m.
The winding-up petition was issued against Lycamobile UK Ltd, along with sister companies Lycatel Services Ltd and Lycamoney Financial Services Ltd, all owned by founder and chair Allirajah Subaskaran. Lycamobile has been a significant donor to the Tory party, giving over £2.1m between 2011 and 2016.
The company has a history of filing accounts late and faced scrutiny in 2015 when employees were seen depositing large sums of cash at the Post Office. Although there is no suggestion of a connection to the VAT dispute, Lycamobile has faced challenges with its financial reporting and auditing processes. The latest auditor, PKF Littlejohn, was unable to sign off on the company’s accounts due to a lack of sufficient audit evidence.
In the most recent financial year, Lycamobile reported a £24m loss as compared to an £8m profit the previous year. The company also experienced a malware attack that impacted customer services. The company has not yet provided a comment on the winding-up petition. HMRC cited taxpayer confidentiality rules for not being able to provide further information.
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