Mubbashir Alam set up eight fake clothing companies in an attempt to claim false VAT repayments. The fake companies were described as manufacturing children’s clothing, dealing in large quantities of cloth and yarn and selling sewing machines, and stolen identities were used to disguise ownership.

Alam was originally jailed for the fraud in November 2014 and given a five year term. At Manchester Crown Court he has now been told he has to repay the stolen tax within three months or go back to jail for four years, and still be required to pay.

The court decided that Alam had benefited from his crimes by £1,053,586 and ordered him to repay £397,235 based on evidence of his assets provided by HMRC investigators, which included more than £328,840 in investments and known bank accounts and tainted gifts of almost £70,000 to other family members.

Debbie Porter, assistant director, fraud investigation service, HMRC, said: ‘Alam went to great lengths to distance himself from the fake companies he set up to commit his frauds and stole a substantial sum of public money to line his own pockets. HMRC will pursue every avenue to ensure that the UK VAT system is not abused in this way and that we recover all the stolen money to restore it to taxpayers’ funds.’