Dominic Chappell, the serial bankrupt who purchased the retail giant BHS for £1, has been arrested as part of an investigation into an unpaid tax bill worth £500,000, it has been reported.

HMRC is understood to have arrested the 49-year-old in a raid on his home in Dorset, England.

The British business man and former racing car driver, who has been declared bankrupt on three occasions, is accused of evading taxes on the profits he made prior to the collapse of BHS earlier this year.

The sum of the tax bill is comprised of £365,000 in VAT and £196,306 in corporation tax.

While HMRC has...