The directors of a Milton Keynes car hire company have been found guilty of a £150,000 VAT fraud which involved claiming refunds on vehicles which were ordered but not purchased, following an investigation by HMRC.

Anthony Church managed the car hire business and ran it with a second director, Paul Barrett. HMRC's investigation uncovered a trail of false invoices for 59 vehicles, including two Jaguars, that were never delivered, cancelled orders and false VAT returns.

Church and Barrett attempted to claim more than £157,165 but part of the repayment was stopped. Church also misled HMRC officers during one visit by indicating that the transactions had actually taken place.

Church was sentenced to 15 months in prison and ordered to pay £88,000 while Barrett received a 16 week prison sentence suspended for two years and ordered to pay £500.

Adrian Farley, HMRC assistant director of criminal investigation, said: 'The directors abused their position in the company to commit VAT fraud. They ordered expensive vehicles, knowing that they couldn't pay for them, with the sole purpose of getting invoices to claim repayments of tax they weren't entitled to. This blatant attack on the tax system not only robbed the Exchequer of public funds, but is also unfair to businesses that diligently abide by the rules.'