Two Essex men have been arrested on suspicion of being involved in a £2.2million tax fraud.

Officers from HM Revenue and Customs (HMRC) searched three homes in the county in early morning raids as part of an international investigation.

A Chelmsford man, aged 36, and a Braintree man, aged 39, were among four people arrested during the raids yesterday.

Two men from Dagenham and Hertfordshire were also arrested, while two homes in County Kerry, Ireland, were also searched.

Computers, business records and mobile phones were all seized for forensic examination.

It is alleged the suspects set up an elaborate scheme of sub-contractors within the civil engineering industry with the sole intention of defrauding HMRC of VAT and PAYE payments.

Martin Brown, assistant director of criminal investigation at HMRC, said: “This is a major investigation into what we suspect is a well organised and professional attempt to manipulate the UK tax system to steal around £2.2million – money which would otherwise be used to finance the UK’s vital public services.

“I would encourage anyone with information regarding tax evasion and fraud to contact the Customs Hotline on 0800 59 5000.”

All those arrested have been bailed until next March while the investigation is ongoing.