Insiders from within Leicester's textile industry say that the demand for cheap clothes was fuelling fraudulent activity within the city. With factories unable to make a profit from the low prices demanded by retailers, many suppliers were turning to VAT fraud. Andrew Bridgen, Conservative MP for North West Leicestershire, said it was "absolutely endemic in huge swathes of the city". "There are gangs of factory owners going around in brand new four-wheel drives and there are very, very poor exploited workers who are actually living in fear in the city, and you can feel it on the street," he said. Some firms involved in money laundering have supplied Boohoo and Select Fashion. HM Revenue and Customs (HMRC), in a statement, said: "In the last year HMRC has completed 25 separate investigations into the VAT affairs of businesses in the textile trade in Leicester and, in so doing, recovered more than £2m of tax that would otherwise have been lost."
Oliver Newlan & Paul Kenyon, 'Leicester textile firms 'involved in money laundering'', BBC
