Two Hampshire businessmen who ran pizza franchises in the south of England have been jailed for a £600,000 VAT fraud.

Mukesh Patel and Harishchandra Desai were franchisees of Pizza Hut UK Ltd and operated four takeaway restaurant outlets in Southampton, Poole and Bournemouth. The men traded as Pizza Delivery Services Ltd from October 2002 to September 2011.

An HMRC investigation found that although the company was registered for VAT, the men only declared takings from three of their four outlets. Figures for the Poole restaurant were not included on VAT returns.

Working with Pizza Hut UK to analyse sales data, and records HMRC established that Pizza Delivery Services Ltd suppressed the turnover figures from 1 July 2007 to 30 June 2010. There were differences between data supplied by the men to HMRC and that supplied to Pizza Hut UK Ltd, resulting in a VAT shortfall of almost £200,000. The pair failed to supply VAT returns for any of the restaurants from July 2010 to September 2011, resulting in a further VAT debt of over £400,000.

John Cooper, HMRC's assistant director of criminal investigation, said: 'Desai and Patel ran four lucrative pizza franchises, but greed and a desire to fund their comfortable lifestyles and other business ventures led them to commit calculated VAT fraud over a number of years. We would like to thank Pizza Hut for their assistance and co-operation in bringing these men to justice.'

An earlier civil investigation by HMRC into Pizza Delivery Services Ltd found the men had submitted nine false VAT purchase invoices to HMRC between April 2005 and July 2007 to reduce the amount of VAT due.

The men pleaded guilty at Southampton Crown Court on 8 October 2013 to cheating the public revenue of £598,415 in VAT, and have been sentenced to 18 months in jail. Confiscation proceedings and a review of the men holding company directorships are to follow.