Eight men have been arrest in conjunction with a red diesel laundering scheme, which evaded almost £12.5million in tax per year

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HM Revenue & Customs has announced that police will be cracking down on red diesel laundering, after a widespread operation led to eight arrests.

Two illegal fuel laundering plants in Merseyside and Kent were discovered this week, and the suspects, who are aged between 37 and 61, have been bailed until April 2015.

It is estimated that these two red diesel laundering operators were capable of producing nearly 120,000 litres of illicit fuel per day, cheating the taxman out of almost £12.5million in revenue.

A further 11 premises were searched in a wide-ranging investigation that involved Merseyside, Lancashire, Essex, Kent, West Midlands and Staffordshire police forces.

Sandra Smith, assistant director of criminal investigation at HMRC, said: “It is wrong that honest businesses should be undercut by criminals involved in making or selling laundered fuel.”

She added that red diesel laundering generates “tonnes of toxic waste” and illicit red diesel can damage fuel pumps.

Red diesel is marked for use in marine vessels and benefits from a lower rate of tax. Laundering schemes such as these use chemicals to remove the dye and sell it on for an illegal profit.

The RYA’s current advice on purchasing red diesel is as follows:

  • Keep receipts for diesel purchased in the UK, to prove that it was bought in the UK, and request that your retailer marks them “duty paid”
  • You should also log the date of refuelling and engine hours to reinforce these records
  • Do not carry red diesel anywhere other than in your craft’s main fuel storage tanks;
  • Do not purchase red diesel in a country where the purchasing of rebated fuel by leisure craft is prohibited by law