Just a quarter of small businesses have taken the necessary steps in preparation for what is being described as the 'biggest tax change in a generation'.

Figures from Intuit QuickBooks suggest that, with one week to go until the Making Tax Digital (MTD) deadline, only 25% have done everything they need to in time for the legislation.

The study revealed that 18% of small businesses have never heard of MTD, while another 24% say they are not prepared. A further 15% said they will still be keeping paper receipts, despite the changes to an entirely digital platform.

There has been a 50% rise in the number of small businesses that believe MTD will be positive for their business, Intuit QuickBooks said.

Over half of the businesses surveyed said they expect to be compliant by the end of March. Nearly a third (30%) anticipate becoming compliant in April, while 17% expect to achieve compliance in May or later. Although the legislation comes into effect on 1 April, businesses only have to be compliant by the time of their first VAT return submission period after the deadline.

Chris Evans, vice president and UK country manager at Intuit QuickBooks, said: "We understand that for some businesses, the transition to digital will not be without stumbling blocks. However, it presents a huge opportunity to streamline operations, drive efficiencies and simplify tax. It will enhance cashflow management and allow them to get paid faster and access capital to grow, powering prosperity across the UK."