The dawn raids across Lancashire, Merseyside and East Sussex were carried out by 85 HMRC investigators and local police as they swooped on 19 business and residential addresses in Preston, Liverpool, Blackpool, Accrington and Hastings.

The arrests follow a long-running investigation – codenamed Operation Grassland – into an alleged VAT fraud and the subsequent laundering of the criminal proceeds, linked mainly to the building trade.

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.