RBS staff held in film tax fraud investigation

Five current and former employees of Royal Bank of Scotland's(RBS)investment banking arm have been arrested as part of a wider investigation into tax evasion thought to involve at least two other City banks.

Four current and one former staff member of RBS's global banking and markets division were arrested at their homes on Wednesday in a series of raids, as HM Revenue & Customs (HMRC) investigated allegations City financiers have been using film finance schemes to evade taxes, the Telegraph reports.

The London office of the taxpayer-backed lender's investment banking unit also was searched in connection with the investigation, which is understood to involve at least two other City banks.

More than 15 people are thought to have been arrested as part of the HMRC probe, which is part of a crackdown on tax evasion.

Last night, HMRC confirmed the arrests: "As a result of an on going HMRC investigation into tax-related criminal offences, HMRC has arrested a number of people, some of whom work for UK banks.

"This investigation relates to the actions of the people arrested in relation to their own financial affairs and is not connected to the business activities of the banks."

At least one of the RBS investment bankers arrested last week is understood to have worked for its equities business and according to one source one of those held has a senior management position.