HMRC is set to eliminate paper letters for millions of taxpayers starting in April next year. The tax office aims to transition to a “digital by default” approach to achieve yearly savings of £50 million by 2028/29.
During the recent Budget announcement, HMRC confirmed the gradual phasing out of paper communications will commence in April 2026. Going forward, individuals will receive digital correspondence in their HMRC online account or through the HMRC app. However, households without internet access or facing difficulties with digital services will continue to receive physical letters. HMRC’s phone lines will also remain operational.
Taxpayers who prefer receiving paper letters can opt to continue doing so. Initially, individuals using the HMRC app, online Personal Tax Account (PTA), or Business Tax Account (BTA) will be the first affected groups.
HMRC will prompt individuals to verify their contact details when the rollout begins. The tax office sends out letters for various reasons, such as notifying about changes in tax codes or requirements to register for self-assessment.
In a recent update, HMRC disclosed sending over 200,000 letters to sole traders and landlords earning over £50,000, who will soon need to submit quarterly updates using HMRC-approved software if their turnover exceeds £50,000 from self-employment or property income.
Although the rollout begins in April 2026, HMRC advises people to prepare for the transition now. Taxpayers will need suitable software, with free and paid options available. The software will provide real-time tax bill estimates throughout the year, aiding in cash flow planning and preventing surprises during tax season.
According to HMRC, finding software that suits individual business needs is crucial. Taxpayers using spreadsheets or accounting software can opt for compatible software that meets the new requirements.
Craig Ogilvie, the Making Tax Digital director, emphasized the importance of preparing for tax changes. He highlighted the benefits of spreading tax administration tasks throughout the year and the availability of free software options, noting positive feedback from testing participants on the system’s user-friendliness.