Shaun Clark, of Wellcroft Grove, Tingley, ran two recruitment agencies and pocketed the VAT he charged his customers rather than pass it on to HM Revenue and Customs (HMRC).
The 58-year-old, who was disqualified from running a business for five years in 2009, used money from the fraud to buy two houses in Tingley and a luxury holiday lodge in Cleethorpes. He also spent around £30,000 leasing luxury cars.
Proceedings are now under way to recover the stolen money.
Clark ran Maxim Healthcare Ltd and Iron Bridge (Yorkshire) Ltd from the same address on Bond Street, Wakefield, and pocketed £470,867 which should have been paid to HMRC between May 2014 and July 2016.
Sandra Smith, Assistant Director of the Fraud Investigation Service, at HMRC, said: "Clark deliberately stole money which should be used to fund our public services, to fund a lifestyle beyond his means. He pocketed enough money to pay the salaries for 21 newly qualified nurses for a year.
"We will continue to pursue criminals who think it is acceptable to charge their customers VAT and pocket the money for their own benefit. Anyone with information about tax fraud should report it to HMRC online or contact our Fraud Hotline on 0800 788 887.”
HMRC began looking into Clark’s tax affairs when he applied to register another company for VAT at the same address.
Investigators found Iron Bridge (Yorkshire) Ltd charged customers VAT but never submitted a VAT return, and occasionally used company details of Maxim Healthcare Ltd on invoices.
Officers also found Maxim Healthcare Ltd continued to charge customers VAT despite not submitting a VAT return since April 2014.
Clark admitted VAT fraud at Leeds Crown Court on May 11. He also admitted running a business whilst disqualified on August 29.
He was sentenced to 27 months in prison at the same court on Friday.