The government has SLOT ONLINE told business leaders it will take a "cautious approach" to firms that owe it money in the wake of the coronavirus pandemic.
The message came in a letter from Business Secretary Kwasi Kwarteng to the Institute of Directors and R3, which represents insolvency firms.
In the letter, first reported by the Financial Times, he said enforcing insolvency would remain a last resort.
The government has spent billions protecting the economy from Covid.
As part of these efforts, measures preventing firms from being wound up if they fall into insolvency have been extended until the end of September.
However, it is feared some companies could struggle to survive when emergency support measures begin to be removed.
Government help available to businesses includes loans, tax relief and cash grants.
However, many firms will have deferred taxes, including VAT, that will start to fall due as the country emerges from the pandemic.
When company insolvencies involve unpaid VAT and income tax, HMRC has the status of "preferential creditor", which means it gets paid first.
But business leaders want the government to ensure this is used to help companies restructure, rather than to shut them down.
In the letter, seen by BBC News, the business secretary writes that he "recognises the path back to full trading and coming off government support will be difficult for many companies".
