Penalties
MTD penalties, explained.
Making Tax Digital uses penalty points for late submissions rather than an instant fine, and HMRC has softened the rules for the first year. Here's exactly what applies, and when.
Checked against HMRC guidance on
The short version
| 2026 to 2027 tax year | From 6 April 2027 | |
|---|---|---|
| Late quarterly update | No penalty points | One penalty point per missed deadline |
| Reaching four points | n/a for quarterly updates | £200 penalty |
| Late tax return (final declaration) | Penalties apply | Penalties apply |
| Late payment | Penalties and interest apply | Penalties and interest apply |
No points for late quarterly updates in 2026 to 2027
HMRC isn't giving penalty points for late quarterly updates during the 2026 to 2027 tax year, the first year of MTD. If you've missed one, you can still send it now. You do have to send all four before you can file your final declaration, and that, along with paying your tax, still has penalties if it's late.
How points work from April 2027
- Each quarterly deadline you miss earns one penalty point.
- When you reach four points, you get a £200 penalty.
- Each further missed deadline while you're at four points means another £200.
This applies to everyone in MTD from 6 April 2027, including people who joined in 2026 and the new £30,000 group. Points can be cleared after a period of filing everything on time; check HMRC's guidance for the exact rules for your situation.
Avoiding them
- Know your dates: 7 August, 7 November, 7 February and 7 May, then the final declaration by 31 January.
- Send something on time even if it's not perfect. Updates are cumulative, so you can correct figures in the next one.
- Get reminders. Our free checker can email you before each deadline.