HMRC is set to eliminate paper letters for millions of taxpayers starting in April next year as part of its digitalization initiative to save £50 million annually by 2028/29. The move was confirmed during the recent Budget announcement, signaling the gradual phasing out of paper communications, with digital letters to be accessible through the HMRC online account or app.
However, households without internet access or facing digital service challenges will still receive written correspondence from HMRC. Taxpayers who prefer paper letters will have the option to continue receiving them. Initially, individuals using the HMRC app, online Personal Tax Account (PTA), or Business Tax Account (BTA) will be affected.
HMRC will prompt individuals to verify their contact details when the transition begins, as letters are commonly sent for various reasons such as tax code changes or self-assessment registration. Additionally, HMRC disclosed that over 200,000 letters have been issued to sole traders and landlords with qualifying income exceeding £50,000, who will soon be required to submit quarterly updates using approved software for turnovers exceeding £50,000 from self-employment or property income.
While the rollout is slated for April 2026, HMRC advises individuals to prepare for the shift promptly. Taxpayers will need suitable software for compliance, and HMRC assures access to support teams to aid in the transition. The department emphasizes the importance of selecting software tailored to individual business needs for real-time tax estimations, aiding in financial planning and avoiding surprises.
According to HMRC, taxpayers can opt for free or paid software options to align with the new requirements. Making Tax Digital director Craig Ogilvie emphasized the significance of adapting to the evolving tax landscape, stressing the benefits of spreading tax obligations throughout the year instead of facing last-minute challenges during the Self Assessment period. Feedback from testing participants indicates that the system is user-friendly once familiarized with it.