HMRC is set to eliminate paper letters for millions of taxpayers starting in April next year. The tax office initially introduced the “digital by default” initiative to save £50 million annually by 2028/29. Following the recent Budget announcement, the gradual phasing out of paper communications will commence in April 2026. Going forward, taxpayers will receive digital letters in their HMRC online accounts or through the HMRC app.
For those without internet access or facing digital service challenges, HMRC will continue to send letters by mail and keep phone lines operational. Taxpayers who currently use the HMRC app, online Personal Tax Account (PTA), or Business Tax Account (BTA) will be among the first groups affected and can opt to keep receiving paper correspondence if preferred.
HMRC will prompt individuals to verify their contact details when the transition begins. The tax office recently issued over 200,000 letters to sole traders and landlords with qualifying income exceeding £50,000, informing them of the requirement to submit quarterly updates using HMRC-approved software if their turnover surpasses £50,000 from self-employment or property income.
While the rollout starts in April 2026, HMRC advises people to prepare for the change in advance. Taxpayers will need suitable software for compliance, with a range of free and paid options available. This software will provide real-time tax bill estimates throughout the year, aiding in cash flow management and preventing surprises during tax season.
According to HMRC, finding software that suits individual business needs is crucial for seamless tax management. The department emphasizes the importance of adapting to the new system, as it will become mandatory in the future. Early preparation and familiarity with the software are key to a smooth transition, with free software options already accessible.
Craig Ogilvie, Director of Making Tax Digital, highlights the importance of preparing for the upcoming changes. He emphasizes the shift towards spreading tax administration tasks throughout the year, rather than the traditional rush during Self Assessment season. Participants in testing have provided positive feedback on the system’s user-friendliness once they become accustomed to it.