Five people involved in the rag trade have been arrested on suspicion of a £300,000 tax fraud and money laundering offences following a raid this morning.
Three men aged 45, 43 and 19 and two women aged 45 and 41, all from Leicester, are currently being questioned under caution by HM Revenue and Customs criminal investigators.
Mobile phones, computers, business records and substantial sums of cash were seized after three residential properties and one factory in Leicestershire were searched this morning. The five people were arrested on suspicion of alleged offences of tax evasion.
The arrests are part of ongoing HMRC taskforce operations targeting the rag trade across the UK.
Gary Lampon, assistant director of criminal investigation for HMRC, said: "Today's action follows our announcement last year of specialist taskforces targeting tax cheats in high-risk trade sectors such as the rag trade. The vast majority of people play by the rules, but we will not tolerate those who choose to break the rules by evading tax.
"Honest businesses have absolutely nothing to worry about. However, if you deliberately seek to evade tax, HMRC can and will track you down. You will then face not only a heavy fine, but possibly a criminal prosecution as well.
"We would encourage anyone with information regarding tax evasion and fraud to contact the Customs Hotline on 0800 59 5000."
