Alan Devere, 52, was said to have no assets and there was little point in going ahead with a Proceeds of Crime application.
At Shrewsbury Crown Court, prosecutor Kevin Saunders said there was no realistic prospect of securing any monies and that Devere had no hidden assets.
He said a statement of means showed that Devere’s house at Artillery Road in Park Hall, Oswestry, had been repossessed.
“There was no money to meet the mortgage and a second charge on the property. There were bank overdrafts and credit cards which could not be cleared,” he said.
At a hearing in August Devere had admitted making three fraudulent VAT claims between 2009 and 2012 linked to his computer repair firm, Analysed PC Solutions.
Almost half of the £40,000 refunds related to Ryanair flights which had prompted a HM Revenue and Customs investigation.
The court heard Devere had been declared bankrupt and had worked 70 hours a week at two jobs, but had got into financial difficulties.
Judge Robin Onions had imposed an eight- month suspended prison sentence after hearing that Devere was the main carer for his severely disabled son. Devere had also been ordered to do 250 hours unpaid work and was told he would have to pay back the money.
At court yesterday Judge Onions ordered an inquiry into the origins of a photograph published the day after Devere was sentenced which apparently showed him enjoying a luxury sunshine holiday. HM Revenue and Customs released the photographs, which showed him looking tanned and relaxed on foreign holidays in Africa, Crete and Mallorca.
The judge said it undermined the sentence he passed made on the basis Devere was using money adapting his home for his disabled son.
Judge Onions said any material relevant to money being used for luxuries should have been part of the sentencing issues and would have been an aggravating feature.
Mr Adrian Roberts, for Devere, said his client had had respite breaks from caring for his son.