Robert Waterman, 43, was investigated by HMRC who found he had created a fake trade in computer memory sticks to claim back VAT between April 2013 and March 2015.

Waterman, who had been banned from being a company director, claimed to be exporting memory sticks to Dubai through his company Asset Innovations UK Ltd. he would then reclaim VAT as they were being exported outside of the EU. Instead he was faking purchase invoices for the goods and sending empty parcels to a PO Box address in Dubai.

He used the fake trade to file monthly VAT returns with a further £530,000 being withheld as HMRC became aware of the fraud before arresting him in June 2015.

Waterman used the £4.75m proceeds from his fraud to buy a £1.15 million house with no mortgage, drive a Range Rover Sport and fund a holiday home in Marbella, Spain. He also bought a £310,000 property outright in Ilford.

HMRC has secured a restraining order worth £4 million on his assets, as it looks to recoup the full proceeds of Waterman’s crime.

Paul Barton, assistant director, Fraud Investigation Service, HMRC: ‘Waterman went to great lengths, even flying to Dubai to set up a foreign address, to execute his scam. His sole intention was to steal money to fund a millionaire’s lifestyle with cash that should have been funding vital public services.

‘Now, as a result of our investigation, not only is Waterman behind bars but already we have restrained his assets. We will not tolerate tax fraud and our job doesn’t finish when someone is jailed. We will now continue our confiscation proceedings to reclaim all the money he stole.’

Waterman pleaded guilty to cheating the public revenue, money laundering, furnishing false documents with the intent to deceive in relation to fraudulent VAT returns, operating a company while a banned director and absconding while on bail.