Royal Bank of Scotland has been drawn into a criminal tax fraud investigation as five current and former employees of its investment banking arm have been arrested as part of a wider probe thought to involve at least two other City institutions.

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 that City financiers have been using film finance schemes to evade taxes. 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. The news is set to inflame the political and public outcry surrounding RBS, as the majority state-owned bank prepares to hand out £500m in bonuses to staff at its investment banking arm. 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....Read more here--: RBS staff held in tax fraud investigation