A leading Midlands businessman who withdrew from the process to become a peer over claims about his taxes has hired chartered accountants to prove he has done nothing wrong.

Sir Anthony Bamford, who has run Staffordshire-based JCB since 1975, is now expected to join the House of Lords as one of more than 20 new Tory peers created by David Cameron.

But attempts by Mr Cameron to make him a peer in May were blocked when an official in HM Revenue and Customs apparently raised concerns about his tax returns.

The JCB chairman, who is worth an estimated £950million and donated more than £1.5million to the Conservatives through his firm, withdrew from the process after stories about his finances were leaked to the a national newspaper.

He hired chartered accountants PricewaterhouseCoopers to conduct a detailed investigation of his finances and produce a report.

They confirmed he had done nothing wrong - and discovered that the taxman actually owed him money, he said.

And Sir Anthony said he paid full UK taxes and was not a “non dom” who avoided paying normal tax rates.

In an interview with London’s Evening Standard, he said: “I had PricewaterhouseCoopers draw up a report into all my taxes over the last 15 years.

"It eventually turned out that for quite a bit of the period in question I was actually owed money by the taxman. There was nothing untoward in any year in any transaction but the damage had been done.”

And he added: “I am a UK taxpayer. I am not a non dom. I pay a very large amount of tax every year personally because I earn a lot of money.

“I have no tax schemes. My tax return is a very simple one. I have no outstanding tax matters at all.”

It emerged in 2006 that Sir Anthony was President of the Midlands Industrial Council, a group of business leaders backing the Tories.

Labour had criticised the council for making donations to the Conservative Party without revealing who exactly the money had originally come from.