Boris Johnson's campaign uses offices of firm that paid no tax for three years

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Boris Johnson's campaign uses offices of firm that paid no tax for three years

Details: Parent Category: Africa and The World; Category: The World; Created on Wednesday, 02 May 2012 00:00; Hits: 3923

Boris Johnson's campaign uses offices of firm that paid no tax for three years

Lycamobile's Canary Wharf site has been used for phone canvassing sessions for the Back Boris 2012 campaign"

Rajeev Syal

Boris Johnson's campaign for re-election as mayor of London has been utilising the offices of an international mobile phone company that has paid no corporation tax in Britain for three years.

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Lycamobile's Canary Wharf offices have been used on at least five occasions to conduct and co-ordinate telephone canvassing sessions for the Back Boris 2012 campaign.

The latest available figures show the company did not pay any tax between 2008 and 2010, despite generating a turnover of between £47m and £88m.

The disclosure will embarrass Johnson's campaigners, who have sought to put the issue of tax at the centre of their campaign and accused Ken Livingstone of dodging tax.

Lycamobile gave the Conservative party £136,180 in the current quarter and £40,000 in the quarter before that, making the company the Tories' third biggest donor over this period.

Neither the Back Boris campaign nor the company has responded to requests to clarify whether the use of the offices has been declared as a donation to the Electoral Commission, or will be declared after the election. A spokesman for the Back Boris campaign said: "All donations are dealt with strictly in accordance with electoral laws."

The Back Boris website shows that on at least five occasions, the campaign team called for volunteers to attend Lycamobile's offices in the Docklands in east London.

Last month, the campaign called for supporters to meet at Lycamobile's Wallbrook Building in E14. "To help keep London moving in the right direction, come join a great group of Boris Backers as we ring voters to share Boris's record and listen to their priorities for the capital. We'll be calling from our new call centre near Canary Wharf," it reads.

Johnson lavished praise upon Lycamobile at the company's fifth birthday last July. He told journalists that Lycamobile was as dynamic as London itself and joked that its mobile phone technology was "unhackable". The footage of Johnson is now on YouTube.

The company's accounts are nearly two years late and it has been threatened with dissolution by Companies House. At the end of March, Lycamobile persuaded the regulator to suspend the move.

The company has insisted it has not paid taxes because it was "growing the business" and therefore had not generated taxable income.

The company was founded by Subaskaran Allirajah, an entrepreneur who is pictured on his website with prominent politicians including the development secretary, Andrew Mitchell, and the business secretary, Vince Cable.

Curiously, executives from the company attended a fundraising benefit for Livingstone in a Mayfair restaurant where they discussed the possibility of giving £100,000 – but no money has been handed over.

The company had an £88m turnover in 2010, the latest year for which accounts are available. In 2009 the firm took in £47m and in 2008 it received £2.7m. However, because Lycamobile reported losses, the firm has been tax-free: it did pay £8,000 in 2008, but this was refunded in 2009.

Allirajah controls another company, Lycatel, that sells cheap international calling cards. Between 2008 and 2010 Lycatel had a turnover of £260m, but again paid no tax.

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Cheap international calls are big business, as low-paid migrant workers look for the best rates to phone home.

In July, Lycamobile issued an advertisement claiming: "Call India, Pakistan and Bangladesh landlines for only 1p a minute". The Advertising Standards Authority banned this misleading ad for playing down the way Lycamobile rates increase after 15 minutes. In February, Lycamobile faced censure for issuing leaflets offering "1/2p a minute" international calls.

A Lycamobile spokesman has previously claimed that the company paid all taxes due. The delay in publishing this year's accounts was, he said, a result of a "very thorough" audit by Ernst & Young. "This has caused a delay in finalising the 2011 annual statements. These statements have now been completed and are awaiting final audit sign-off," he told the Guardian last week.

The company says it has generated and paid taxable receipts in the UK of over £54m in VAT as well as National Insurance and PAYE contributions.

Regarding the discussion of a donation to Livingstone's campaign, the spokesman added: "It is only natural that a company staffed by thousands of individuals of varying political backgrounds and conscious of representing those differing views is then free to attend events organised by any political party or none."

Source: The Guardian UK