HMRC is set to eliminate paper letters for millions of taxpayers starting in April of the following year. The tax authority’s move towards a “digital by default” approach aims to achieve annual savings of £50 million by the fiscal year 2028/29.
Following an announcement earlier this year, HMRC confirmed during last month’s Budget that the gradual phasing out of paper communications will commence in April 2026. Going forward, taxpayers will receive digital letters through their online HMRC account or the HMRC app.
HMRC will continue to communicate via post with households lacking internet access or facing difficulties with digital services, while also maintaining open phone lines. Taxpayers will have the option to opt for paper letters if preferred, with initial impacts affecting users of the HMRC app, online Personal Tax Account (PTA), or Business Tax Account (BTA).
Upon the rollout commencement, HMRC will prompt individuals to verify their contact details. The tax authority sends letters for various reasons, such as notifying about tax code changes or self-assessment registration requirements.
HMRC recently issued over 200,000 letters to sole traders and landlords with qualifying income exceeding £50,000, informing them of the obligation to submit quarterly updates using approved software if their turnover surpasses £50,000 from self-employment or property income.
While the rollout begins in April 2026, HMRC encourages preparation for the transition ahead of time. Taxpayers will need suitable software, with both free and paid options available. The software provides real-time tax estimates throughout the year, aiding in cash flow planning and minimizing surprises during tax season.
According to HMRC, taxpayers should select software tailored to their business needs for seamless integration with existing records and compliance with new requirements. Making Tax Digital director Craig Ogilvie emphasized the importance of early preparation for the forthcoming changes, highlighting the benefits of spreading tax administration across the year. Feedback from testing participants indicates the system’s user-friendly nature with free software options available.