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HMRC halts automatic generation of paper tax returns

HMRC has announced it will stop automatically generating paper self assessment tax returns in a bid to save paper and encourage taxpayers to migrate to its online services.

From April, blank self assessment returns will no longer be generated automatically and instead, taxpayers who have previously filed on paper will now receive a short notice to file. This notice will be accompanied by HMRC’s stated intention to communicate digitally and the provision of information about managing their tax affairs through online Personal Tax Accounts.

ICAEW’s Tax Faculty highlights that paper self assessment forms will continue to be available to download or on request by phoning HMRC. Where HMRC can identify the estimated 1-3% of taxpayers whose personal circumstances mean they cannot file online, they will continue to receive a blank paper return. However, this exercise is unlikely to be an exact science and HMRC will not be able to identify all those who are digitally excluded.

In 2019, HMRC sent out 500,000 returns automatically, while 94% of taxpayers filed their return online.

Angela MacDonald, HMRC’s Director General for Customer Services said: “Most customers manage their tax affairs online. It’s easy, secure and available 24 hours a day. Customers can also sign up for email alerts and online messaging. It doesn’t even have to be done all in one go – they can stop, save what they’ve done, and pick up where they left off later.

“Digitisation remains an HMRC priority but we’re still committed to giving taxpayers the ability to choose what’s best for them, so those who want to file a paper return can still do so.”

However, the ICAEW’s Tax Faculty has warned that the decision on whether to opt for paperless communications should be “considered carefully, as some taxpayers will find the paper reminders useful to pass on to their agent or as a prompt to take action”. 

It also adds that: “Email notifications from HMRC advise that there is a new message in the personal tax account, but they do not include any information about the nature of the message.”

HMRC’s initiative to reduce paper also includes stopping the provision of blank P45 and P60 stationery to employers and annual tax summaries moving online.