HMRC is set to eliminate paper letters for millions of taxpayers starting in April of the following year. The tax office had previously announced a shift towards being “digital by default” to achieve annual savings of £50 million by 2028/29.
In the recent Budget announcement, HMRC confirmed the gradual phasing out of paper communications, commencing in April 2026. Going forward, taxpayers will receive digital letters in their HMRC online accounts or through the HMRC app. However, HMRC will still correspond via letters with households that lack internet access or face difficulties with digital services, and its phone lines will remain operational.
Taxpayers who prefer paper letters can opt to continue receiving them. The initial groups affected will include individuals already using the HMRC app, online Personal Tax Account (PTA), or Business Tax Account (BTA).
HMRC will prompt individuals to ensure their contact details are accurate when the transition begins. The tax office sends letters for various reasons, such as notifying about changes in tax codes or the requirement to register for self-assessment.
As part of the digital transition, HMRC has dispatched over 200,000 letters to sole traders and landlords with qualifying income exceeding £50,000. These individuals will soon need to submit quarterly updates using HMRC-approved software if their turnover surpasses £50,000 from self-employment or property income.
While the rollout is scheduled for April 2026, HMRC encourages people to prepare for the change early. Taxpayers will need suitable software, with both free and paid options available. The software will provide real-time tax bill estimates, aiding in cash flow planning and avoiding surprises in January.
According to HMRC, finding software that suits individual business needs is crucial for successful digital tax management. Connecting compatible software to existing records can streamline the process and meet the new requirements efficiently.
Craig Ogilvie, the Making Tax Digital director, emphasized the importance of preparing for the upcoming changes. He highlighted the benefits of spreading tax admin tasks throughout the year, rather than rushing to complete self-assessment returns in January. Feedback from testing participants indicates that the system is user-friendly once users become familiar with it.