Five men have been arrested in North London, on suspicion of smuggling tobacco and alcohol, after an operation by HM Revenue and Customs (HMRC) to tackle an estimated £1m tax fraud.

The men were arrested after suspected illegal cigarettes were discovered in a vehicle at an industrial unit in the Tottenham area. The cigarettes were found in hollowed out metal plating, part of a cargo that had arrived from Poland. Further searches of two other industrial units revealed large quantities of suspected smuggled alcohol.

In total, HMRC officers seized 3,500,000 cigarettes and over 150,000 cans of beer and cider from the industrial units. During subsequent searches of private addresses and vehicles officers seized £40,000 in cash.

The five men have been interviewed under caution by HMRC and bailed until November 2015.

Anthony Swarbrick, assistant director, Fraud Investigation Service, HMRC, said: “The criminals behind the illicit trade in alcohol and tobacco effectively steal over £3.2bn a year from the taxpayer. HMRC is coming down hard on these unlawful and dangerous trades through targeted interventions aimed at the criminals behind them.

“I would encourage anyone with information about the illegal sale of tobacco or alcohol to contact the Customs Hotline on 0800 595000.”