HMRC refused to raid firm investigated for money laundering, citing the fact it was a Tory donor

Tax investigators have been criticised after it emerged they refused to raid the offices of a firm suspected of laundering huge sums of money seemingly because they donated money to the Conservatives.

Officials at Her Majesty's Revenue and Customs last year rebuffed a request from French authorities to assist an investigation into telecoms giant Lycamobile over its financial activities.

And astonishingly, they noted in their refusal letter that the firm was the “biggest corporate donor to the Conservative party led by Prime Minister Theresa May and donated 1.25m Euros to the Prince Charles Trust in 2012", according to BuzzFeed News.

The letter from HMRC also noted that Lycamobile was a huge company with “large assets at their disposal” and would be unlikely to agree to a raid and might respond with a legal challenge.

It said the French may not have provided enough "solid information" against the firm to warrant such a raid.

When first contacted by the site, a spokesman for HMRC said: "No HMRC official would ever write such a letter. This is the United Kingdom for God’s sake, not some third world banana republic where the organs of state are in hock to some sort of kleptocracy."

But when shown a copy of the note, they said the inclusion of the reference to the Tories was "regrettable".

The spokesman added: "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...

“But I can see how this is open to being read that way, which is why that should not be in there."

The spokesman insisted the information about donations had been included a "background" details about the firm.

Shadow Chancellor John McDonnell said the revelations were “deeply concerning” if true.

“The fact that a Tory donor could be allowed to potentially subvert the system will look bad to taxpayers who play by the rules,” he said.

"The Tories have serious questions to answer on this matter, and I hope the Chancellor immediately comes forward to explain this behaviour by HMRC and ensure there was no undue pressure exerted by Conservative Party officials."

Public Accounts Committee chair Meg Hillier vowed to grill HMRC about the claims later this month.

“The size of a company or its connections should not have any bearing on whether HMRC go in and do an investigation,” the Labour MP told BuzzFeed News.

“I think they should explain to the British taxpayer what their rationale was for refusing the request.”

Home Affairs Select Committee chair Yvette Cooper demanded a review into the decision not to assist the French investigation.

“Political donations should never be a reason for HMRC not to act,” she explained.

“The Government must explain what it will do to make sure that there is nothing holding a proper criminal investigation back.”

Meanwhile, Liberal Democrat leader Vince Cable said the response from HMRC was deeply disturbing and demanded the Tories return all donations from Lycamobile until a full investigation had taken place.

The Conservatives meanwhile said they had decided to stop taking money from the global firm two years ago.

French prosecutors have arrested 19 people accused of using Lycamobile accounts to launder money from organised criminal networks.

The firm has donated some £2.2m to the Tories - including more than £800,000 since BuzzFeed News first raised the alarm when it discovered cash couriers working for the firm were depositing rucksacks full of cash at Post Offices around London.