Mark Creswell from Lincoln and Craig Williamson from West Yorkshire, both made a series of false VAT repayment claims between 2008 and 2014. Creswell also failed to declare income from properties he rented, while Williamson lied about his earnings when claiming tax credits.

They spent the money from the fraud on extravagant meals, trips abroad and home improvements. HMRC uncovered the frauds after discovering that the duo’s spending was beyond their declared incomes.

HMRC officers found that while Creswell claimed to earn up to £8,000 a year, his monthly outgoings were regularly about £3,500. Williamson said his annual income was £14,000, but he paid £1,200 per month in rent alone.

Creswell’s letting company submitted 25 false VAT returns stealing £148,154 in tax. He also did not declare that he rented out five properties therefore avoided paying £16,823 in income tax on the rental income.

Williamson and Creswell jointly ran Lincoln Car Sales Ltd. Williamson admitted making up the company’s VAT figures and submitting 23 false returns to fraudulently claim £179,423. He also stole £17,356 in tax credits by under-declaring his income on application forms.

Williamson was jailed for 18 months and Creswell for 12 months at Lincoln Crown Court.

HMRC has now begun proceedings to reclaim the stolen tax.

Richard Paris, assistant director, fraud investigation service, HMRC, said: ‘This was a pre-planned, deliberate attempt by these men to steal public money, in a bid to line their own pockets.

‘HMRC will pursue people like Creswell and Williamson who attempt to defraud the system and take money away from our vital public services.’

Report by Amy Austin