HMRC teams raided illegal tobacco factory in Bishop's Waltham after uncovering operation that would have led to an estimated £300,000 tax dodge

Specialist teams from HM Revenue and Customs (HMRC) raided the factory at an industrial unit , where they found a tonne of tobacco, along with counterfeit tobacco pouches, duty labels and processing machinery.

Two men were arrested in connection with the illegal operation, which would have filled 30,000 standard 50g tobacco pouches in a bid to evade more than £300,000 in tax.

It comes just four weeks after a gang, who set up an illegal tobacco factory in Southampton, were jailed for a total of more than ten years after officers raided a property in John Street.

Tian Yang, Shu Lan Lin, Hua Wang and Yun Wang were snared by their own CCTV which showed around three tonnes of tobacco being illegally processed and packaged in a bid to evade more than £600,000 in tax.

HMRC has confirmed that there is no link between the factory in John Street and the raid in Bishop’s Waltham.

The latest discovery was made after HMRC investigators arrested two men at a Warwickshire Police-led road check at Warwick Services on the M40, where they stopped a van containing around half a tonne of processed tobacco.

Investigations led officers to the factory in Bishop’s Waltham just two days later.

Two men, a 36-year-old from Portsmouth and a 28-year-old from Glasgow, were arrested on suspicion of being involved in the fraudulent evasion of excise duty and have been bailed until May 2015.

John Cooper, assistant director of criminal investigation at HMRC, said: “Disrupting criminal trade is at the heart of our strategy to clamp down on the illicit tobacco market, which costs the UK around £2.1billion a year in lost revenue.

“This is theft from the taxpayer.”

Samples of the tobacco are now being analysed and the rest will be destroyed.

Anyone with information about the illegal tobacco should contact the Customs Hotline on 0800 59 5000.