HMRC is set to eliminate paper letters for millions of taxpayers starting in April next year. The tax office’s initiative to transition to a “digital by default” approach aims to achieve annual savings of £50 million by 2028/29.
Following the recent Budget announcement, HMRC confirmed the gradual phasing out of paper communications will commence in April 2026. Going forward, taxpayers will receive digital correspondence through their HMRC online account or the HMRC app. However, households without internet access or facing difficulties with digital services will still receive paper letters, and HMRC’s phone lines will remain operational.
Taxpayers can opt to continue receiving paper letters if preferred. Initially, individuals utilizing the HMRC app, online Personal Tax Account (PTA), or Business Tax Account (BTA) will be affected. HMRC will notify individuals to verify their contact details once the rollout begins, as letters are sent for various reasons such as tax code changes or self-assessment registration.
HMRC disclosed sending over 200,000 letters to sole traders and landlords with qualifying income exceeding £50,000, who will soon need to submit quarterly updates via HMRC-approved software if their turnover surpasses £50,000 from self-employment or property income. While the rollout begins in April 2026, HMRC advises people to prepare for the transition in advance.
Taxpayers will need suitable software for compliance, with both free and paid options available. The software provides real-time tax bill estimates, aiding in cash flow management and minimizing surprises during tax season. Individuals currently using spreadsheets or accounting software can integrate compatible software meeting the new requirements.
Craig Ogilvie, the Making Tax Digital director, emphasized the importance of preparing for the upcoming changes, highlighting the benefits of spreading tax responsibilities throughout the year. Early feedback on the system’s testing shows user-friendly processes once individuals become familiar with the software.