Exclusive: HMRC files winding up petition against Lycamobile UK
The UK tax authority has hit mobile network operator Lycamobile with a winding-up petition.
As exclusively seen by City PM, HM Revenue and Customs (HMRC) filed a winding-up petition application to the English High Court on Monday.
The target of the legal filing was Lycamobile, the provider of international pay-as-you-go SIMs.
A winding-up petition is a formal legal process used against a company that owes money and is unable to pay its debts. It is a common tool used by HMRC against companies that have failed to pay tax bills.
Founded by businessman Subaskaran Allirajah, this is not the first run in Lycamobile with HMRC.
Back in 2020, the business that previously donated £2.1m to the Conservatives was revealed to be embroiled in three disputes with HMRC over at least £60m in allegedly unpaid tax.
Just last month, the first-tier tribunal, a tax specialist tribunal, ruled in favour of HMRC over the value-added tax treatment of customer “bundles” that were sold by Lycamobile UK over a period of about seven years.
The aggregate amount of VAT in dispute between Lycamobile and HMRC was £51m.
This comes after the FT reported in June that auditors PKF Littlejohn were unable to sign off the accounts of Lycamobile, as it had “not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion”.
Last year in France, a criminal court in Paris convicted the company’s French entity of committing fraud with respect to value-added tax and money laundering and fined them €10m.
A spokesperson for Lycamobile told City PM: “We confirm that the winding-up petition issued by HMRC against Lycamobile UK Limited on Monday 12 August related to amounts that were already paid by Lycamobile UK Limited or under dispute and it appears that the petition was issued in error.
“HMRC has acknowledged that these amounts, less the disputed sums, were in fact already paid. The matter is not related to the recent HMRC tribunal ruling on VAT which will be subject to appeal.
“HMRC have indicated that the winding up petition against Lycamobile UK Limited will be withdrawn. We will continue to work closely with HMRC to swiftly conclude the matter.”
City PM approached HMRC for comment.