29/05/2014 13:07 BST | Updated 29/05/2014 14:59 BST

Tory Donor Lycamobile Gives Tories More Money, Despite Not Paying Tax

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SAINT PETERSBURG, RUSSIA - SEPTEMBER 06: In this handout image provided by Host Photo Agency, British Prime Minister David Cameron speaks during a press conference at the end of the G20 Leaders' Summit on September 6, 2013 in St. Petersburg, Russia. Leaders of the G20 nations made progress on tightening up on multinational company tax avoidance, but remain divided over the Syrian conflict during enter the final day of the Russian summit. (Photo by Ramil Sitdikov/Host Photo Agency via Getty Imag

The Tories have come under fire for accepting just over £105,000 from telecoms giant Lycamobile, which has not paid corporation tax in Britain since 2007, despite making millions each year.

Lycamobile's latest donation, accepted this March, means they have given the party well over £500,000 since 2011, making them one of the party's biggest corporate donors. The firm gave £102,620 to the party, and a further £2,400 to the party's branch in the Cities of London and Westminster.

David Cameron last year urged companies to "wake up and smell the coffee" over mounting public anger about the tax affairs of multinationals like Starbucks, Google and Amazon.


Lycamobile's donations to the Tories in full, according to the Electoral Commission

According to its latest accounts, Lycamobile posted a turnover of £142 million over the financial year 2012 to 2013, declaring a profit of just over £4 million. This marked an increase in turnover from £120 million the previous year.

The firm defended its lack of corporation tax payments by claiming that its past losses ate up any money it would owe in corporation tax payments and that it ploughed any profits back into the group in order to grow the business.

Labour MP Austin Mitchell, member of the Public Accounts Committee, told HuffPostUK: "What they're doing looks like a fairly standard racket to me but unfortunately it`s permissible.

"It should be stopped but neither government has been interested in closing up the loopholes in the tax system. So to answer your questions, I'm not satisfied with their tax arrangements, they should start paying corporation tax but their avoidance is legal and does indicate a wider problem with a lax tax system."


A Lycamobile stand at the Oval.

Michael Landau, Lycamobile's chief financial officer, told HuffPostUK last September: "Every cent that this business earns goes back into growing this business into making it a more valuable proposition."

Landau suggested that the firm would not start paying corporation tax in the UK for at least a year, when it is deemed sufficiently "mature".

Margaret Hodge, the high-profile chair of the Public Accounts Committee, previously branded the firm a 'tax offender".

She said: "No political party should accept donations from a company that avoids paying its fair contribution to the common good. The Government loses credibility if it says it condemns tax avoidance and then accepts money from obvious offenders."

Tory MP Henry Smith hit back at Hodge over her remarks, writing on Twitter: "Does Margaret Hodge really care about tax avoidance, why hasn't she investigated @unitetheunion who haven’t paid tax in 2 years?

"@LycamobileUK are investing their profits in British jobs. This is a good thing. Margaret Hodge must stop talking our economy down."