Two arrested for £80m VAT fraud

The scheme is alleged to involve computer chips and mobiles

Two people from Essex have been arrested following a customs investigation into an alleged £80m VAT fraud.

Customs officers questioned two people from Chelmsford about a so-called "missing trader" fraud involving mobile phones and computer chips.

The fraud allegedly involves buying goods VAT-free from the European Union (EU) and supplying them to businesses in the UK.

The goods are sold to a series of companies and then back to the EU without payment of VAT to the UK Government.

Cash from the scheme is believed to have been channelled through bank accounts of two Chelmsford-based companies.

On Tuesday, customs officers searched offices and homes in Essex, Sheffield, Nottingham and Leeds.

They arrested a 33-year-old man and a 32-year-old woman who have both been released on bail.

The government estimates VAT missing trader fraud costs £2.5bn a year.