VAT fraud in the UK has reached record levels, HM Revenue and Customs statistics are expected to show. Criminal activity may have accounted for £6.5bn worth of UK trade in the last quarter alone, says an investigation by the BBC’s Panorama.

Officials say that fraudsters import goods from Europe tax-free, sell them with VAT, then disappear without passing the tax on to the government.

In some cases goods are said to be imported and exported again and again.

Justin Rowlatt has been investigating the problem for the Panorama programme, to be screened this Sunday.

He said the most profitable form of VAT crime was “carousel fraud.”

It means the same goods, usually mobile phones or computer chips, are repeatedly imported and exported.

Every time the goods leave the UK, the exporter claims back VAT from the government.

Revenue and Customs said criminal gangs that run VAT fraud constantly changed the way they operated and that it was therefore adapting its techniques to tackle the problem.

Panorama - Do You Want to be a Millionaire? will be screened on BBC1 on Sunday at 10.15pm.