HMRC is set to eliminate paper letters for millions of taxpayers starting in April of the following year. This move aligns with their goal of transitioning to a “digital by default” approach, aiming to save £50 million annually by 2028/29.

In the recent Budget announcement, HMRC confirmed that the gradual phasing out of paper communications will commence in April 2026. Going forward, taxpayers will receive digital letters through their HMRC online account or the HMRC app.

For individuals without internet access or facing difficulties with digital services, HMRC will continue sending letters by post and keep their phone lines operational. Taxpayers who prefer paper correspondence can opt to continue receiving physical letters. Initially, individuals using the HMRC app, online Personal Tax Account (PTA), or Business Tax Account (BTA) will be affected.

HMRC will prompt taxpayers to verify their contact details when the transition begins. The tax office sends letters for various reasons, such as notifying about tax code changes or the need to register for self-assessment.

HMRC has already dispatched over 200,000 letters to sole traders and landlords with qualifying income exceeding £50,000. These individuals will soon be required to submit quarterly updates using HMRC-approved software if their turnover surpasses £50,000 from self-employment or property income.

While the rollout is scheduled for April 2026, HMRC advises people to prepare for the change in advance. Taxpayers will need suitable software, which can be obtained through free or paid options. The software will provide real-time tax bill estimates throughout the year, aiding in cash flow planning and preventing surprises during tax season.

Craig Ogilvie, the Making Tax Digital director, emphasized the importance of preparing for the upcoming changes. He highlighted the benefits of MTD, stating that it spreads tax administration across the year, eliminating the rush to complete Self Assessment returns in January. Feedback from early testing participants indicates that the system is user-friendly once individuals become familiar with it.