Sixteen people have been arrested in dawn raids as part of an HM Revenue & Customs investigation into a suspected £4.3 million construction VAT fraud.

HMRC investigators and police raided 19 business and residential addresses in Preston, Liverpool, Blackpool, Accrington and Hastings.

The arrests come after a long-running HMRC investigation, codenamed Operation Grassland, into an alleged VAT fraud and laundering, chiefly in the building industry.

Peter Hollier, HMRC assistant director of criminal investigation, said: “Operation Grassland is an HMRC-led investigation targeting a suspected organised crime gang involved in VAT repayment fraud and the laundering of the criminal profits.

“Further details cannot be provided at this early stage, as our investigation is continuing. However, tax fraud and attempts to launder the proceeds of crime are treated extremely seriously by HMRC, and we will relentlessly pursue any individuals or crime gangs believed to be attacking the Public Revenue in this way.”

All those arrested have been bailed pending further investigations.

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