The UK is facing a £1.7bn fine after failing to stop Chinese criminal gangs using the country as a fraud "hub", despite repeated warnings, BBC reports.

Clothes and shoes were imported through the UK at fictitiously low values for years to avoid duties, the European Anti-Fraud Office (Olaf) has found.

As a result, investigators say the EU budget has lost millions of pounds in customs duties.

HMRC said it plans to challenge Olaf's claims about lost revenues.

The Olaf investigation found the UK to be a "significant hub" for so-called undervaluation fraud - where importers can profit from evading customs duties and related taxes.