HMRC plans to eliminate paper correspondence for millions of taxpayers starting in April next year, transitioning to a “digital by default” approach to save £50 million annually by 2028/29. The gradual phase-out of paper letters will commence in April 2026, with taxpayers receiving digital correspondence through their HMRC online accounts or the HMRC app.
While the tax office will still reach out to households without internet access or facing digital service challenges, individuals can opt to continue receiving paper letters. Initially, those using the HMRC app, online Personal Tax Account (PTA), or Business Tax Account (BTA) will be affected.
HMRC will verify contact details when the rollout begins, sending letters for various purposes such as tax code changes or self-assessment registration. Over 200,000 letters have been issued to sole traders and landlords with qualifying income over £50,000, requiring quarterly updates using HMRC-approved software if their turnover exceeds £50,000 from self-employment or property income.
Taxpayers are advised to prepare for the change as HMRC emphasizes the need for suitable software, offering both free and paid options. The software provides real-time tax bill estimates, aiding in cash flow planning and preventing surprises in January.
With Making Tax Digital for Income Tax approaching, taxpayers are encouraged to start preparations. The system offers free software options, and feedback indicates simplicity once users are familiar with it. HMRC stresses the importance of selecting software tailored to individual business needs to facilitate the transition smoothly.
