Two brothers have narrowly avoided being sent to jail after HMRC found they had evaded tax on the sale of a plot of land.

Property developers, Stephen and Michael Hirst, from Yorkshire, used offshore companies in Gibraltar and the British Virgin Islands to avoid paying £3,247,613 in tax from the sale of land in Wakefield in 2007 for £10.9m.

The land was originally owned by their Wakefield-based company, Tims Investments, which was transferred to their Gibraltar-based company with the same name. A residential property development has since been built on the land.

Gibraltar-based Tims Investments was under the control of Tims Investments in the British Virgin Islands, which was controlled by the Hirst brothers.

HMRC, which launched a civil tax investigation in 2013, offered the brothers the opportunity to admit to the crime and pay back what they owed in full, plus a penalty payment, or risk a criminal investigation.

The pair pleaded guilty to cheating the public revenue on 18 July last year and repaid the total amount, including fines by 4 June 2024 after asking for more time to gather the funds.

Stephen Hirs, aged 55, was sentenced to two years in prison, suspended for two years, along with a £12,000 fine and an eight-year director ban.

Michael Hirst, 62, received an £8,000 fine, a two-year sentence suspended for two years and also an eight-year director ban.

Zoe Gascoyne, deputy director, of fraud investigation service, HMRC, said: “Stephen and Michael Hirst had numerous opportunities to be honest about their tax affairs.

“Instead, they lied about the network of firms and ownership structures they had set up to commit fraud and have ended up with criminal convictions.

“We are pleased to have recovered every penny of the money they stole, which will now be used on the public services we all rely on.

“We continue to work tirelessly to ensure the tax system is fair to all and this case shows once again that we will work with international partners to ensure a level playing field for all taxpayers.”

The scale of the tax fraud was substantial and the investigation took 10 years to complete.

Andrew Fox, solicitor for the Crown Prosecution Service, commented: “The defendants dishonestly manipulated the system and made every attempt to evade their tax liabilities.

“The amount of unpaid tax was substantial, and involved millions of pounds that should rightly have been paid into the public purse. We are pleased to have secured justice and the repayment of the tax.

“Our specialist prosecutors will continue to work closely with investigators such as HMRC to prosecute cases of tax fraud and bring perpetrators to justice.”