Stanley Miller, from Ryton, was found to have pocketed £5,952,339 in VAT, income tax and National Insurance contributions (NICs) between May 2008 and May 2016.

He failed to hand over tax deductions from staff pay packets and used phoney invoices to claim VAT repayments at his three companies; MGM Precision Ltd, T-Tec (Precision Engineers) Ltd and SLM Engineering Ltd; in Newburn, Newcastle.

Daniel McDonald, worked for all three companies and helped Miller with the frauds. The fraud was uncovered following a routine VAT visit to SLM in April 2016 when officers were shown various invoices; but later checks revealed they were fake.

Investigators found Miller had forged invoices and submitted false VAT returns to fraudulently reclaim £1,055,294 for all three of his companies.

It was also discovered Miller failed to pass on £4,897,045 of income tax and NICs from MGM employees.

Miller was convicted of cheating the public revenue and VAT fraud at Newcastle Crown Court and has been sentenced to eight years and three months in prison. He has also been disqualified from being a company director for nine years.

McDonald provided Miller with invoice templates which were subsequently altered and used to support false VAT repayment claims. He was also convicted of cheating the public revenue and VAT fraud, and was sentenced to three years in prison.

Proceedings are underway to recover the stolen money.

Cheryl Burr, assistant director, fraud investigation service, HMRC said: ‘This was a shocking and sustained attack on the tax system. Miller abused his position to steal money from the public purse and his employees. He was wrong to think he could get away with it and now he is paying the price behind bars.’

Report by Pat Sweet