Re: What is it with "Digital"?
"Digital" has a specific meaning within HMRC, denoting that the CIO also has responsibility for delivery of the new digital taxation systems.
Remember, HMRC is a pretty retro organisation in places. Only a couple of years ago any mail you sent to them was forwarded to a central mail sorting facility whereupon it was physically re-posted to whichever department was processing it whereupon they would then scan it (usually in some unreadable image format) into their local case management process (usually some godforsaken always-full windows file share).
Likewise there were (and still are) plenty of processes that involve physically handling bits of paper. That's what they mean when they say "digital" i.e. not physical.