Kampala: Lycamobile, an internationally known mobile virtual network operator (MVNO), is facing severe financial and legal challenges after an eight-year VAT dispute with HM Revenue and Customs (HMRC) in the UK.

HMRC has filed a winding-up petition against Lycamobile UK Ltd, seeking to recover £51 million in unpaid taxes. The petition was submitted to the Insolvency and Companies Court in London, following the company’s loss in a protracted tax tribunal battle earlier this year.

This marks a critical turning point for Lycamobile, which could face compulsory liquidation unless it reduces the debt or provides evidence to dispute the claim.

The company has also been embroiled in other legal troubles, including the conviction of its French entities for money laundering and VAT fraud in 2023. These controversies have cast doubt on Lycamobile’s future, particularly as the UK proceedings are happening alongside similar financial challenges in Germany.

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In 2021, Lycamobile’s German subsidiary, “Lycamobile Germany,” rebranded to “Amalasandan Dienstleistungen GmbH” before filing for bankruptcy due to a €70 million tax debt. The company’s failure to pay VAT on sales in Germany and its disputed relationship with an Irish sister company have resulted in multiple court battles and insolvency proceedings.