A BUSINESSMAN from Grays who worked with his pal to evade paying £2.5million in corporation tax and VAT has been jailed for five years.

Michael Woodward Jr, 30, of Blackshots Lane, Grays - who ran a business supplying raliway workers - lied about company profits and created false invoices from bogus consultancy firms, controlled by his best friend and co-defendant Richard Ponsford from Ongar.

The duo were found guilty of cheating the public purse and were sentenced to 10 years behind bars between them following a three-week trial at Southwark Crown Court.

Paul Barton, Assistant Director of Criminal Investigation at HMRC, said: "Woodward and Posford thought they had created the perfect crime, stealing millions from law-abiding taxpayers.

"They thought their criminal actions would go undetected but they were wrong. They have lost their freedom which has been traded instead for time behind bars.

The men under-declared their profits to reduce the corporation tax due and used fake consultancy invoices to reduce their VAT payments by £2.5million.

The money was transferred to four consultancy firms controlled exclusively by Ponsford. Between 2004 and 2011 he made 387 cash withdrawals which the men used to supplement the wages of employees and family members.

The fraud was stopped in its tracks when they were arrested in March 2011 and HMRC officers searched residential and business premises in Essex.

The only business records found for the seemingly successful companies controlled by Ponsford were handwritten notes indicating the cash he withdrew was returned to Woodward.

Mr Barton added: "We will now seek confiscation orders to recoup the money they stole for the country’s public services."