Seven people have been arrested in Gravesend and Greater London as HM Revenue and Customs investigate an alleged £38 million VAT fraud operation.

It is thought to have involved the trading of emissions allowances - with an organised crime group operating a network of companies trading in large numbers of the so-called carbon credits.

Around 27 properties have been raided and officers believe other arrests are likely.

Those arrested are believed to be part of an organised crime group operating a network of companies trading large volumes of high-value carbon credits.

Les Beaumont, deputy director of criminal investigation for HM Revenue & Customs (HMRC) said:

"HMRC investigates all criminal attacks on the tax system, halting theft of revenue, gathering evidence and supporting prosecutors in bringing offenders before the courts.

"We always aim to recover the proceeds of crime, restoring that money to the public purse where it belongs. That is our intention in this and all similar cases.

"The Government took decisive action to prevent this type of fraud recurring by zero rating carbon credits for VAT."