David Hay, 56, from Hyvot Grove, ran firms that oversaw major building and renovation works in Edinburgh, Northern Ireland and the Republic of Ireland.

Edinburgh Sheriff Court heard that Mr Hay was fully aware of his obligations to charge and pay VAT and admitted to investigators that he “just never got round to paying over the VAT” – in spite of his claim that he knew he would “get caught eventually”.

Mr Hay was sentenced to 20 months in prison at Edinburgh Sheriff Court yesterday after pleading guilty at an earlier hearing in September to being knowingly concerned in the fraudulent evasion of VAT contrary to the VAT Act 1994. The total value of the VAT fraud was £118,666.

Anne Marie Gordon, assistant director, fraud investigation service, HMRC, said: “Crooks like Hay create an uneven playing field, undercutting the honest businesses who do pay what is due. That’s something we won’t tolerate. Instead of passing on the VAT he charged customers to fund vital public services, he chose to keep it for himself even though he knew we would catch him.”