A businessman who made almost £5million by reclaiming VAT on empty boxes he sent abroad has been jailed for six years.

Robert Waterman, of Vicarage Lane, Chigwell, was investigated by HM Revenue and Customs (HMRC) who found he had created a fake trade in computer memory sticks to fraudulently claim £4,757,858 in VAT repayments between April 2013 and March 2015.

Waterman used the proceeds from his fraud to buy a £1.15m 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.

The 43-year-old claimed to be exporting memory sticks to Dubai through his company Asset Innovations UK Ltd. He would then reclaim all the VAT as they were being exported outside the EU.

In reality Waterman, who was already banned from being a company director, was not exporting or even buying the memory sticks. Instead he was forging purchase invoices for the goods and sending empty parcels to a PO Box address in Dubai.

He used his fake trade to file monthly VAT returns to get his hands on the money with a further £530,000 being withheld as HMRC investigators closed in on Waterman’s fraud and arrested him in June 2015.

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

Paul Barton, assistant director of HMRC’s fraud investigation service, said: “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.”

At an earlier hearing 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.

Today he was jailed for six years at Chelmsford Crown Court and banned from acting as a company director for ten years.