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There has been an alarming surge in business fraud in the last year, bighting company formation.
In the first half of this year fraud levels were 42 per cent higher than during the same period in 2006.
An explosion in "carousel fraud" is being blamed for the increase.
This refers to instances of criminals charging retailers VAT on imported items but failing to hand over the money to Her Majestys Revenue and Customs.
The term business fraud accounts for fraud of more than £50,000 in value.
Reported business frauds in the first half of 2007 amounted to £538 million. Of this, 87 per cent was describable as carousel fraud.
The data was collected by audit, accounting and business services firm BDO Stoy Hayward.
Simon Bevan, head of BDOs fraud services team, said: "Sadly, crime does often pay at the moment if you are a fraudster, which explains why large frauds are on the increase.
"Professional criminals have been quick to notice the millions that can be made from VAT carousel frauds.
"While there has been a crackdown, I am sceptical it will halt this avalanche of huge frauds against the taxpayer," he added.
Business can be particularly vulnerable to business fraud during, or shortly after company formation.
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