Five car showrooms in Dublin were raided last week and almost 40 luxury cars impounded, including Bentleys, Range Rovers and Mercedes, as part of an ongoing crackdown on tax irregularities in the Irish motor trade.

It follows similar raids in June, when 54 luxury vehicles were seized and €1m (£715,000) recovered.

The cars are believed to have been imported from UK dealerships, although a spokeswoman for the Irish Police would not confirm the country of source.

She also declined to outline the size of the problem.

Operation Tie was set up by the Criminal Assets Bureau in March to investigate alleged avoidance of Vehicle Registration Tax (VRT) by registering luxury cars as commercial vehicles and selling them at a discount to customers.

It suspected sales staff of importing luxury cars but only paying VRT at basic rate, keeping between Euro 5,000 and Euro 20,000 (£3,570-14,300) per car.

In the latest raids, Irish Police arrested a man in his 50s, reported to have worked for the Revenue Commissioners and believed to be the insider who had processed the VRT returns for the dealers.