Phillip Hammond is coming under pressure to delay controversial digital tax reforms amid warnings of mass chaos if he pushes ahead with scheme next month as planned.

Fears are mounting that the move, which affects 1.2 million business, will lead to more tax errors as 97 per cent of businesses have still not signed up and tens of thousands still unaware it is coming.

Under so called "Making Tax Digital" VAT registered businesses with income above £85,000 are being told by the taxman that they must start using new software which lets them record their tax bills in real-time.

To comply with HMRC's new system businesses must buy this software from a list of companies which HMRC has checked work with its own systems and start using it to log their bills.

But take-up has been slower than expected as some businesses are complaining that the upgrade is proving to be so complicated and expensive, that it is pushing them to the brink of collapse.