David Lai owned Newcastle city centre restaurants Mangos and Aura, and was originally jailed in September 2015 for a 20 month term, after HMRC discovered he forged invoices to fraudulently reclaim VAT.

Lai had told HMRC he spent more than £700,000 on renovations to his Newcastle restaurants. But an investigation revealed this was a lie and he had used false documents in his attempt to claim £107,775 in VAT refunds, of which £54,775 was paid while the rest was withheld.

During a routine visit, a HMRC compliance officer spotted spelling mistakes on invoices that looked unprofessional and some were suspiciously similar to each other. A £45,000 invoice misspelt the company’s address while a forged letterhead had ‘Limtied’ instead of ‘Limited’.

Lai was handed a confiscation order for £65,014 at Newcastle Crown Court in January this year and told to repay the money within three months.

Now he has been sentenced to another 20 months in prison at Leeds Magistrates’ Court, after he failed to fulfil the requirements of the confiscation order.

His debt remains and increases by £14.24 a day until paid. The amount currently stands at more than £68,000.

Diccon Wood, assistant director, fraud investigation service, HMRC, said: ‘It is important that criminals like Lai don’t benefit from their crimes. That is why HMRC will always look to reclaim their criminal profits. Lai stole money which should have been used to fund our public services and failed to repay it when he was told to do so. Now he is paying the price by having to spend another 20 months in jail.

‘But it doesn’t end there; this isn’t pay up or go to prison instead. Lai still owes the money and until he pays it the amount will increase as daily interest is added.’

Report by Pat Sweet