A vet tried to claim more than £300,000 from the taxman in a loophole described as “an unbelievable free lunch”.

The scheme aimed to take advantage of a Government cash incentive to encourage small businesses to file their tax returns online.

But Revenue and Customs staff threw out the claim.

Christopher Ranson set up 500 limited companies believing each was entitled to a £250 payment if they filed income tax returns online.

He and a partner, Neal Kissel, paid £15,875 to create the firms, aiming to make £50,000 profit by selling each on with the Government cash in its bank account.

He has now lost an appeal against the rejection of the claims. A tax commissioner ruled: “The regulations ... are not concerned with situations created to enable the likes of Messrs Ranson and Kissel to help themselves to free lunches.”

Mr Ranson, with £12,700 from Mr Kissel, set up companies with himself as secretary and his wife Monica Alfred-Ranson as director. Each cost £31.75 to set up. Every company then filed a tax return saying the companies were employing Mrs Alfred-Ranson for £1 a year and claiming the £250 available to employers who filed returns online.

Mr Ranson, 46, of Naseby Cottages, Fletching, near Uckfield, has been a vet since 1986.

In 2004 he became a chartered accountant.

The scheme was designed to make money by attracting vets from overseas to work as freelancers in Britain.

But only 24 companies were sold and revenue staff paid out on only 33 claims.

Mr Ranson, now a full-time accountant, told The Argus he was considering taking the issue to the Court of Appeal.

He acknowledged his claim was not in the spirit of the offer but said there was nothing unusual about firms taking advantage of Government allowances.