Thompson has responded to Nicky Morgan’s, chair of the Treasury Committee, letter which questioned the tax authority’s willingness to investigate economic crime after Buzzfeed reported on a leaked email from HMRC which saw the tax authority refusing to investigate Lycamobile over money laundering and tax fraud allegations.

Thompson has announced that a leak inquiry is underway to try and determine how HMRC’s correspondence with the French authorities entered the public domain.

However, Thompson has admitted that ‘it was a mistake’ to include background information about Lycamobile’s donations to the Conservative party in its email to the French authorities as ‘it created an opportunity for others to misconstrue the reasons and motivations for our decisions’.

The letter stated: ‘I should be absolutely clear that the decision not to execute the French request for a search warrant was taken entirely on the grounds that there was insufficient information provided to meet the statutory criteria for a UK search warrant.’

Thompson went on the explain that HMRC remains committed to helping overseas partners and will carry out any requests for investigatory activity as far as possible.

Thompson said: ‘We can take action only in accordance with UK law, and, where a request does not meet the standards of UK law, we work with out partners to help them to meet those standards.

‘In the case of Lycamobile, we did just that – working with the French authorities over a period of several weeks to help them understand the extent of the information that they would need to supply as part of any application for a UK search warrant.’

In 2017/18 out of the 247 requests for mutual legal assistance or investigations orders, HMRC executed 191. Of the remaining 56, 31 were redirected to the Home Office, 13 were not compliant with UK law and 12 cases are awaiting further information.

Morgan said: ‘Thompson said that the inclusion of information about Lycamobile’s political donations in the leaked email was irrelevant to the decision that HMRC had taken about the French investigation. He called the inclusion of such information ‘a mistake’.

‘I will ask HMRC to provide a reassurance that similar mistakes have not been made in response to other such requests from overseas authorities.

‘As part of the Committee’s inquiry into economic crime, and the Sub-Committee’s inquiry into tax avoidance and evasion, we will examine HMRC’s conduct in pursuing investigations into money laundering and tax fraud.’

Report by Amy Austin