HMRC is set to eliminate paper letters for millions of taxpayers starting in April of the upcoming year. This move aligns with their initiative to transition to a “digital by default” approach, aiming to achieve annual savings of £50 million by 2028/29.
Following the recent Budget announcement, HMRC confirmed the gradual phasing out of paper communications starting in April 2026. Going forward, taxpayers will receive digital letters through their HMRC online account or the HMRC app. Exceptions will be made for households without internet access or facing difficulties with digital services, with HMRC continuing to offer communication via traditional mail and phone support.
Taxpayers who prefer paper correspondence can opt to receive it, with initial impact expected on users of HMRC’s app, online Personal Tax Account (PTA), or Business Tax Account (BTA). HMRC will prompt individuals to verify their contact details once the transition commences, utilizing letters for various purposes such as notifying about tax code changes or self-assessment registration requirements.
In preparation for the rollout commencing in April 2026, HMRC has issued over 200,000 letters to sole traders and landlords earning over £50,000, necessitating quarterly updates through HMRC-approved software for those exceeding the specified income thresholds. Taxpayers are encouraged to prepare early for the impending changes.
HMRC emphasized the importance of acquiring suitable software for tax compliance, mentioning the availability of both free and paid options. The tailored software will provide real-time tax estimates, aiding in financial planning and preventing surprises during tax deadlines. Taxpayers currently using spreadsheets or accounting software can find compatible solutions to meet the new requirements seamlessly.
Craig Ogilvie, the Making Tax Digital director, highlighted the significance of adapting to the evolving tax landscape, emphasizing the benefits of spreading tax responsibilities across the year rather than rushing during the traditional January Self Assessment period. Early feedback on the system from testing participants indicates user-friendly software options, making the transition smoother for taxpayers.