Customs swoop on £2.5m fuel fraud operation

Officers from HMRC and the Police Service of Northern Ireland searched a residential address on Monday in the Cullyhanna area, where equipment, believed to be a diesel laundering plant, was uncovered in outbuildings.

The plant, with the potential to produce an estimated 5.8 million litres of illicit fuel a year, evading around £2.5 million in taxes and duty, was seized along with 11,000 litres of red diesel and two vehicles.

Around four tonnes of toxic waste was removed from the site.

An 18-year-old man has been arrested in connection with the investigation and has been released on bail.

Inquiries into the suspected fraud are ongoing.

The laundering of red diesel – a low-tax fuel primarily for agricultural use – has historically involved its filtration through chemicals or acids to remove the government markers, and is then sold on as road fuel to unsuspecting motorists.

Figures for 2013-14 estimate that the revenue loss from illicit use of fuel has now fallen to around £100 million in the UK, of which around half relates to fraud in Northern Ireland.

In percentage terms, the tax gap has fallen from 12% to less than 1% in Great Britain and from 26% to 8% in Northern Ireland.