Yes, I know exactly how it works - but tax isn't payable on an illegal operation or for illegal items. So how would tax man get his cut then?
If it's illegal income (Crime) then they can cease it under POCA
There was a case discussed on Pro$$ienet some years ago, the "Agency" said they called th epolice over a matter, and then the Police knicked the owner and seized loads of assets and froze bank accounts etc, the owner was saying on there that even her partners bank account was frozen under POCA and they were powerless as the act is so strong, it was Camberly way I think.
The reality is if the HMRC / Police decide to act then the owners are fucked