Businesses across the county are being warned about changes to the way they submit their tax returns.

A new incentive from HM Revenue and Customs, Making Tax Digital, is intended to get businesses filing their taxes more quickly and efficiently, ending annual tax returns for millions of firms.

However, a survey by the Institute of Charted Accountants in England and Wales last Autumn found 40% of businesses were unaware of the changes, while a further 20% had made no preparations.

Alistair Hayward-Wright, from county firm Hayward Wright Accountancy Group, which has offices in Worcester, Redditch and Solihull, said many businesses in the region were still unaware of MTD, which comes into effect from April 1, and risk being punished for late payment.

Mr Hayward-Wright, said: “With so many businesses unaware and unprepared just a few months ago, it is highly likely that a significant proportion will still be in the same position.

“There is absolutely no time to lose. This is the law. Digital reports will have to be filed online and there has to be the correct digital record keeping or the government will impose hefty financial sanctions.

“Millions of businesses will have to be complying with MTD in just a few weeks’ time so we are warning as many businesses as possible to get prepared quickly or risk huge financial issues.”

Making Tax Digital is part of government plans to modernise and make HMRC one of the most digitally-advanced tax administrations in the world.

Businesses are required to use the system from April 1 onwards, with organisations such as trusts, ‘not for profit’ organisations, local authorities and public corporations given a deferral until October 2019.

The decision to reform the process came when HMRC found that each year, the exchequer faces costs of £9 billion per year through avoidable mistakes.