Two men have been jailed for a total five years and nine months for setting up bogus hay, straw and animal feed businesses as a front to fraudulently claim back VAT.

The men were sentenced by Winchester Crown Court on Monday for evading a total of £1.2million. The case followed a detailed investigation by HM Revenue & Customs officers.

Gary Fernihough, 48, of Stoke on Trent was sentenced to three years and Ian Jones, 48, of Southampton to two years and nine months on the charge of being knowingly concerned in the fraudulent evasion of VAT.

The pair, together with Gary Fernihough’s brother who was sentenced last year, set up three wholesale businesses pretending to sell horse and animal feed, hay and straw.

They even leased two business premises to continue the masquerade of trading legitimately — but never actually bought or sold anything. Instead, they created false paperwork to fraudulently claim back VAT — over a period of eight years from February 1998 to October 2004.

Sentencing the men at Winchester Crown Court on Monday 6 October, Judge Barnett said: “You are a disgrace to the commercial world.

“This fraud took place over a period of time and required application, sophistication and determination.”

Hay, straw and feed are all zero-rated for VAT. Instead selling goods honestly to animal and horse owners the men created false purchase invoices claiming to have bought vehicles and fuel in order to make deliveries. And then they claimed back VAT repayments on their supposed “purchases”.

HMRC criminal investigation assistant director Peter Hollier said: “Tackling VAT fraud is a priority for the HMRC, and we will not hesitate to pursue those who commit this type of offence.”

The pair used the money they earned from the fraud to take flying lessons, buy property in France and shares in a yacht.