Sheffield MP Jared O’Mara has been arrested on suspicion of fraud, according to a number of sources.
Mr O’Mara, the independent MP for Sheffield Hallam, was arrested at the same time as office manager Gareth Arnold on Friday last week - according to the Mirror.
The newspaper reported that Mr Arnold contacted police in early July to express concerns about Parliamentary expense claims made by Mr O'Mara.
Electronic equipment was reportedly seized as South Yorkshire Police launched an inquiry, the BBC said.
The two men were later released on Saturday pending further enquiries.
It is believed Mr O’Mara will resign when parliament returns in September, Mr Arnold said back in July.
Mr O’Mara previously announced that he would be taking time out from his duties to deal with his “mental health and personal issues regarding self-medication”.
READ MORE FROM YAHOO NEWS UK:
Labour MP on Women’s and Equalities committee apologises for saying Girls Aloud should have an orgy with him
Mr Arnold, his chief of staff, resigned in July with a series of tweets published on Mr O’Mara’s Twitter account.
He said Mr O’Mara had asked him to stay on until a new MP takes the Sheffield Hallam seat.
Mr Arnold said: “From September 3, he’ll be resigning, triggering a by-election.”
He added: “He’s going, there will be a by-election and a new MP before the end of the year.”
Mr O’Mara sensationally took the Sheffield Hallam seat for Labour from former deputy prime minister Sir Nick Clegg in 2017.
Since his victory he has been accused of not dealing with casework and missing several key Brexit votes int the Commons.
Labour suspended Mr O’Mara in October 2017 after he was accused of posting sexist and homophobic comments online before he became an MP.
He later apologised saying: "I was in a bad place back then, and after being bullied and called many of those abusive slurs myself, I repeated them as a way of deflecting from my own low self-esteem and depression.
“But this is not an excuse and I take full responsibility for the unacceptable language I used."
He was reinstated by Labour in July 2018, but resigned from the party nine days later to sit as an independent MP.
Yahoo News UK has contacted South Yorkshire Police for comment.