The tax authorities are sometimes slipping back into old ways despite Government instructions to adopt a flexible approach to companies struggling in the recession, an expert has warned.

And when it happens it can threaten firms' very survival, according to Simon Littlejohns, tax partner at the Birmingham office of PKF Accountants & business advisers.

He cites two examples he has come across where HM Revenue & Customs could have been more commercial and practical when dealing with legitimate concerns raised by two corporate clients.

"The flexible approach to the payment of tax liabilities has in general been working well and these may be isolated incidents… but they are potentially very damaging incidents," cautioned Mr Littlejohns.

The first concerned a Midlands engineering company and a £200,000 VAT bill it was struggling to pay in one go. The bill resulted from a misunderstanding on the part of the client and the amount to be paid will be repaid in full on a later VAT return. Attempts to agree a contra deal to avoid any cash outflow have failed.

Mr Littlejohns charged: "HMRC has insisted that the money must be paid over before it can be repaid. This has put the company concerned at risk and could push them over the edge. The stance is nonsensical."

In the second case, this time involving a retail business, a material figure of tax was owed by the company but HMRC believed it was £5 million more than it actually was. The company was having great difficulty persuading HMRC they had got it wrong, facing what amounted to a Little Britain mentality - "The computer says no…"

"The Government's flexibility offer is working well for the vast majority of taxpayers, but ringing hollow for some," insisted Mr Littlejohns.