A man and woman from Kent have been arrested by HM Revenue and Customs (HMRC) on suspicion of being involved in a large-scale fuel fraud.

It is believed that the fraud duped unsuspecting motorists and robbed taxpayers of more than £200,000 in unpaid fuel duty and VAT.

HMRC officers searched one residential address and two business premises in Gillingham, Rochester and Belvedere on 15 January. Officers seized £40,000 cash at the domestic property and removed computers, business records and other documentation. Pumps and 1,500 litres of what is thought to be illicit fuel were seized at one of the commercial addresses.

It is suspected that rebated kerosene was purchased, laundered and sold illegally to motorists as duty-paid road diesel. The estimated unpaid VAT and duty is £200,000.

John Cooper, assistant director, criminal investigation, HMRC, said: “The misuse of rebated fuel lines the pockets of criminals, can severely damage a vehicle’s engine and can have a devastating effect on legitimate fuel traders, forcing them out of business.

“Anyone with information about fuel fraud or people involved in the sale, storage or distribution of illicit fuel can contact the Customs Hotline on 0800 595000.”

The man and woman arrested were questioned by HMRC investigators and released on bail. The investigation is ongoing.