The taxman is investigating how a convicted fraudster is selling the cheapest petrol in Britain - at just 35p a litre.
Hundreds of concerned motorists have called trading standards and HM Revenue and Customs about how James McDonald, who has served a seven-year sentence for handling counterfeit money, is selling fuel for less than half the normal pump price from the Auld Brig Filling Station in Tullibody, Clackmannanshire.
Since February, for a £100 annual fee, drivers have been able to join his Motor Vehicle Protection Association (MVPA) and fill up with 50 litres of petrol or diesel a week. The 58-year-old, who has a long-standing reputation for finding loopholes in the law, said his operation is perfectly legal and plans to locate MVPA depots around the UK.
He said the money goes towards research and development of a retrofit gadget called the Ripple Generator he's invented, which he claimed cuts carbon emissions and improves fuel efficiency. Mr McDonald once said he had found a way to allow a petrol engine to run on water.
The petrol, sourced from Spain, is provided to his members at cost price to allow people to test the gadget. His literature shows he is exploiting the provisions concerning free movement of goods in the EC Treaty, which state customs duties and charges are prohibited between member states.
Clackmannanshire Council trading standards, currently investigating the activities, has been warning consumers they should take care in dealing with the station.
A trading standards source said the department had limited powers to look into the pricing activities, but added: "We're not saying go ahead or not go ahead. We just don't know what might happen at some stage in the future. It might turn out to be a great thing but, having been in this job for a while, I have found if you find something is too good to be true it usually is."
An HM Revenue and Customs (HMRC) spokeswoman confirmed an investigation of the association is under way, and said: "We can say that the trader is in discussion with ourselves but we cannot comment any further at this time."
A separate HMRC source added: "The point of sale is where the duty's paid and it's paid to the retailer by the purchaser and passed on through us. We're concerned about the duty being paid at the time of purchase."
Mr McDonald served a seven-year prison sentence, imposed in August 1992, for supplying counterfeit money but has always claimed it was the result of illegal entrapment. In 1999, the former law student, who normally represents himself, got a conviction for speeding quashed after pointing out the instrument fitted to the police car involved was not on the list of devices approved by the Secretary of State for Scotland.
Mr McDonald told The Herald that his previous brushes with the law were irrelevant, and added: "If we were a scam of any kind we would not be here. That speaks for itself.
"I am aware of the interest from HM Revenue and Customs and I have spoken to them and have no problem with them.
"We are not reporting to anyone in particular regarding the success of the device, but we would make our results public knowledge - we would have to do that."
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