HMRC is set to eliminate paper letters for millions of taxpayers starting in April of next year. The tax authority’s move towards a “digital by default” approach aims to achieve annual savings of £50 million by 2028/29.
Following the recent Budget announcement, HMRC confirmed that the gradual phasing out of paper communications will commence in April 2026. Going forward, individuals will receive digital correspondence through their HMRC online account or the HMRC app.
While the tax office will still reach out to households without internet access or those facing difficulties with digital services, individuals can opt to continue receiving paper letters if they prefer. Initial groups affected will include individuals already utilizing the HMRC app, online Personal Tax Account (PTA), or Business Tax Account (BTA).
HMRC will prompt individuals to verify their contact details once the transition begins. The tax office has already dispatched over 200,000 letters to sole traders and landlords with qualifying income exceeding £50,000. These recipients will soon need to submit quarterly updates using HMRC-approved software for turnovers surpassing £50,000 from self-employment or property income.
Although the rollout begins in April 2026, HMRC encourages people to prepare for the change in advance. Taxpayers will need suitable software for compliance, with both free and paid options available. The software will provide real-time tax bill estimates, aiding in cash flow planning and avoiding last-minute surprises.
Craig Ogilvie, the Making Tax Digital director, emphasized the importance of preparing for the upcoming changes. With Making Tax Digital for Income Tax approaching, adopting the new system early will be beneficial. Free software options are accessible, and feedback suggests the system is user-friendly once familiarized.
HMRC stressed the importance of finding software that suits individual business needs, especially for those currently using spreadsheets or accounting software. Embracing the digital tax revolution early on will streamline tax processes and reduce the stress of annual tax filing.