The Government was accused last night of “thwarting” enterprise with demands from the owners of collapsed businesses of up to six months of VAT for the right to start again.

Some are facing bills of up to £100,000 after a move by HM Revenue & Customs (HMRC) to target companies risen from the ashes of businesses that have gone under.

Small businesses are going bust at a rate of about 120 a day and about 40,000 are expected to go under next year.

The Revenue is particularly targeting those businesses that make use of the pre-pack administration measures of the 2006 Enterprise Act.

These measures enable owners to sell the assets of a failed business to a new company, usually a shell owned by the former management. they also wipe out debts — including those owed to the tax office.

HMRC has revived a little-known VAT law to demand from these companies a penalty fee or “security for future VAT”. The amount owed is calculated using a registration form on which the entrepreneur declares estimated future revenue.

Until four years ago, HMRC had preferential status on the list of creditors when a business collapsed. This is no longer the case.

Stephen Alamabritis, of the Federation of Small Businesses, said that the policy was at odds with the 2006 Enterprise Act — designed to encourage failed business owners to start again.

He said that the fines were threatening levels of UK start-ups, by issuing penalties just as companies were seeking to get back on their feet and he urged the Government to “take its foot off this particular pedal and allow businesses, where there is no proven fraud or criminal activity involved, to set up again in the normal way”.

HMRC said that it had issued nearly 2,000 fines since April last year. It said that the purpose was “not to prevent businesses from trading but to protect risk to future revenue to the Exchequer and encourage compliance”. It pointed out that taxpayers could ask HMRC to reconsider a decision.

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