A businesswoman who holidayed in Greece and the Canary Islands with the proceeds of a VAT fraud has been ordered to pay back more than £40,000 or face returning to jail.

Last August Katherine Devlin, who had been the director of three Halifax-based companies, was jailed for 15 months after she admitted offences of VAT fraud and money laundering.

Devlin, 29, who is no longer behind bars, was ordered to pay back £41,730 in the next six months or face being sent back into custody for up to 15 months when she returned to Bradford Crown Court yesterday for a further hearing under the Proceeds of Crime Act.

The court heard last year how Devlin, of Wadsworth, Oxenhope, had faked invoices and doctored others to dishonestly reclaim VAT.

Devlin was incorrectly paid just under £145,000 between December 2009 and May 
2012.

Although Recorder Robert Spragg was told yesterday that Devlin’s total benefit from criminal conduct was assessed as being £211,539.37 her available assets only amounted to £41,730.

Judge Peter Benson told Devlin at her sentencing hearing last August that she had many positive qualities as a citizen, but turned to dishonesty when her company began to fail.

• “You resorted to calculated fraud to prop up the business and fund your lifestyle, including holidays,” the judge said.

After Devlin was jailed Sandra Smith, assistant director of criminal investigation, HMRC, said:

• “Devlin used her businesses to steal money by making fraudulent claims for VAT repayments, which she then had paid into her personal bank account.
• She used the cash to fund a lifestyle where she could enjoy luxury breaks, extravagant beauty treatments and almost daily shopping sprees, buying clothing and jewellery, all at the expense of the taxpayer.
• “We hope that this case serves as a warning to others that VAT fraud and the laundering of criminal profit is an extremely serious offence.”