The HMRC is set to eliminate paper letters for millions of taxpayers starting in April of next year. This move aligns with the tax office’s initiative to transition to a “digital by default” approach, aiming to achieve annual savings of £50 million by 2028/29.
During last month’s Budget announcement, it was 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 via the HMRC app.
For individuals without internet access or facing challenges with digital services, HMRC will continue to send letters by post and maintain open phone lines. Taxpayers will have the option to opt for paper letters if preferred. Initially, those utilizing the HMRC app, online Personal Tax Account (PTA), or Business Tax Account (BTA) will be the first impacted groups.
HMRC will prompt individuals to verify their contact details once the rollout begins, as letters are commonly dispatched for various reasons such as tax code changes or self-assessment registration requirements.
In a recent update, HMRC disclosed sending over 200,000 letters to sole traders and landlords earning over £50,000, who will soon need to submit quarterly updates using HMRC-approved software if their turnover exceeds £50,000 from self-employment or property income.
While the rollout begins in April 2026, HMRC is advising people to prepare for the upcoming changes. Taxpayers will need suitable software, with both free and paid options available.
According to HMRC, selecting software that suits individual business needs is crucial. The software will provide real-time tax bill estimates throughout the year, aiding in cash flow planning and preventing unexpected tax bills in January.
Craig Ogilvie, the Making Tax Digital director, emphasized the importance of preparing for the upcoming changes, stating that the system is user-friendly once familiarized with. Early feedback from testing participants indicates that the system is straightforward to use.
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