John McDonnell says HMRC ‘not independent enough’ amid Lyca row

Posted On: 
22nd April 2018

John McDonnell has said Labour would shake up HM Revenue & Customs in the wake of a row over the tax authority’s handling of an investigation into a major Conservative party donor.

The Shadow Chancellor said Labour would bring in a new board to make sure HMRC was “absolutely objectively independent in its decision-making and properly managed”.

BuzzFeed reported this week that HMRC had rebuffed a request from French authorities to aid an investigation into telecoms giant Lycamobile over its financial activities.

According to the site, HMRC’s refusal letter cited the firm’s status as “biggest corporate donor to the Conservative party led by Prime Minister Theresa May”, and pointed out that Lycamobile was a huge company with “large assets at their disposal” which might mount a legal challenge to the raid.

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Speaking on ITV's Peston on Sunday, Labour’s Shadow Chancellor said the row raised questions over the independence of HMRC - and pledged an overhaul of the taxman’s governance if the opposition wins power.

“It isn’t independent as much as it should be,” he said.

Mr McDonnell called for HMRC to be overseen by a new “independent supervisory board” to ensure it was “absolutely objectively independent in its decision-making and properly managed”.

The Shadow Chancellor denied that such a plan would amount to a power grab by Labour, arguing: “Quite the reverse - you don’t argue that in terms of the other boards that are appointed that way by government. At the moment we don’t believe it is sufficiently independent and here’s an example of it.”

Downing Street has insisted that HMRC “never takes political donations into account when it makes decisions on whether to investigate a business”.

A spokesperson added: “My understanding from HMRC is the information was only provided as background to offer a detailed profile of the company to their French counterparts but it was not taken into account by HMRC in deciding whether to support the French application."