HM Revenue & Customs is to dramatically cut the number of physical letters it sends, announcing plans to eliminate most outbound post — unless it directly generates revenue — as part of a broader shift to digital-first communications.
The move, confirmed as part of Wednesday’s spending review, is expected to reduce HMRC’s post output by 75% by the 2028-29 tax year and save £50 million a year.
Taxpayers will still receive letters about unpaid taxes or compliance issues, but most other correspondence, including general updates and notifications, will be moved online.
The government said the change was a key step toward making HMRC a “digital-first organisation”, with at least 90% of customer interactions to be handled online in the coming years.
Tax professionals have voiced concern that the shift could alienate vulnerable customers. Lindsay Scott, spokesperson for the Chartered Institute of Taxation (CIOT), warned the change “risks further damaging customer service” unless safeguards are introduced.
“Plans to phase out post must be handled with care,” Scott said. “About seven million people in the UK still need help to navigate digital services, and they can’t simply be left behind.”
Despite HMRC reporting that 70% of customer interactions are now handled digitally, many taxpayers still rely on paper. Last year alone, more than 300,000 tax returns were filed using traditional paper forms.
The move follows widespread criticism of HMRC’s past digitalisation efforts. The Making Tax Digital initiative has run eight years behind schedule and gone more than £1 billion over budget, according to the National Audit Office.
Digital services under strain
While HMRC champions its webchat and online systems, industry surveys suggest taxpayers remain frustrated. According to a December report by CIOT and the Institute of Chartered Accountants in England and Wales (ICAEW):
• HMRC’s webchat service connected less than half the time
• Satisfaction with webchat was just 28%
• Satisfaction with phone services stood at 56%, with average wait times of 23 minutes
• 34% of callers gave up before being connected — more than double the department’s 15% target
The new funding package also includes £1.6 billion over four years to overhaul HMRC’s core technology and data infrastructure, plus a further £500 million aimed at boosting online service performance.
Revenue pressure driving reform
The digital transformation is part of a wider push by the Treasury to boost tax receipts without raising rates. The government estimates the changes, along with 7,900 new compliance and debt recovery staff, will bring in an extra £7.5 billion a year by 2029-30.
An HMRC spokesperson said: “Reducing the number of letters we send and communicating in different ways instead will provide a better service for our customers in line with modern-day expectations, as well as deliver savings of £50 million by 2028-29.”
However, critics say it’s telling that revenue-generating post – such as tax bills – will remain untouched, while helpful or explanatory letters are phased out.
As one tax adviser put it: “It seems HMRC only wants to write when it’s chasing you for money.”
With pressure mounting to raise tax revenue while improving service, the success of HMRC’s digital-first ambitions may depend on whether the most vulnerable customers are kept in the loop — or simply left behind.
Read more:
HMRC to slash physical post – unless you owe them money