Four people have been arrested as part of a HM Revenue and Customs investigation into a multi-million pound phone scam.

The investigation has been focusing on tax-related phone scams, including calls offering taxpayers a bogus tax refund or threatening them with arrest if they do not immediately pay fictitious tax bills.

The four were arrested and questioned by HMRC on suspicion of money laundering offences.

During the arrests in London on Tuesday, £10,000 of cash was seized along with laptops, mobile phones and SIM cards.

During the past 12 months HMRC has reported 1,742 phone numbers being used in tax-related phone scams to phone companies for removal and responded to over 203,000 reports of phone scams from the public. This represents a 95% increase in reports from the public.

Richard Mayer, assistant director of the Fraud Investigation Service at HMRC, said: “Criminals use a range of techniques in tax-related phone scams, including calling unsuspecting taxpayers to offer a bogus tax refund, or threatening them with arrest if they don’t immediately pay fictitious tax bills.

“These scams often target the elderly and vulnerable. We are a well-known brand, which criminals abuse to try and add credibility to their scams.

“If someone calls, emails or texts claiming to be from HMRC, saying that you can claim financial help, are owed a tax refund or owe tax, and asks for personal or bank details, it might be a scam. Check GOV.UK for information on how to recognise genuine HMRC contact.

“If you can’t verify the identity of the caller, we recommend that you do not speak to them.

“I would urge anyone with information on these types of scams to report it to HMRC online.”