The British Chambers of Commerce (BCC) has called for the government to delay the rollout of its Making Tax Digital (MTD) scheme.
From April 2019, VAT-registered businesses will be required to maintain digital records for VAT and submit digital returns.
To do so, these businesses will need to have MTD-compatible software in place that can connect to HMRC systems using an Application Programming Interface.
However, research from the BCC shows that with 10 months until its introduction, 24% of firms have never heard of MTD and only 10% say they ‘know a lot of details' about it.
Mike Spicer, director of economics and research at the BCC, said:
"We are concerned that far too many firms still aren't clear on what MTD is, or what it means for their operations.
"With just months to go before the deadline, these knowledge gaps could make the timeline for change unworkable for many firms."
The change is set to come in shortly after the UK is due to leave the EU in March 2019, leading to further concerns that HMRC will lack the resources to support firms through both MTD and Brexit.
HMRC has already delayed MTD for individuals until further notice in order to free up capacity for Brexit, but said that MTD for all businesses would go ahead in April 2020 as planned.
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