Making Tax Digital penalty points, worked out.
Tick the deadlines you might miss and see your points build up, when the £200 penalty starts, and when points drop off. Then see what paying your tax late would cost. Every rule is from gov.uk.
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Rules from gov.uk
Late submission points
Tick each deadline you think you might miss. The points and penalties follow as you go, deadline by deadline, on standard quarters (calendar quarters have the same due dates).
How MTD penalties work
“There are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year.”
gov.uk, Penalties for Making Tax Digital for Income Tax
Making Tax Digital for Income Tax uses penalty points for late submissions. You get one point for each quarterly update or tax return deadline you miss, however many businesses you have. Points alone cost nothing.
At 4 points you get a £200 penalty, and another £200 for every deadline you miss after that. Below 4, each point is removed 24 months after the deadline you missed. At 4, points stay until you have been on time for 12 months and have sent anything outstanding from the previous 24.
There are no penalties for missing a quarterly update deadline in 2026-27, the first year. The 2026-27 tax return, due 31 January 2028, does count. Paying late is penalised separately, as a percentage of the tax you owe.
Paying late
Days 1 to 15
No penalty. Interest is charged from the day after the payment was due.
Day 16
3% of the tax still owed at day 15.
Day 31
Another 3%, of the tax still owed at day 30.
From day 31
10% a year on what is still owed, charged daily, for up to 2 years.
Good to know
Your first year
In your first year of the new penalties you have 30 days, not 15, to pay in full or set up a payment plan before a late payment penalty is charged.
Payment plans pause penalties
If you agree a payment plan with HMRC and keep to it, late payment penalties are paused.
Payments on account
Late payment penalties apply to the balancing payment for the year, not to payments on account. Interest still runs on those.
The year before you join
If you join Making Tax Digital in April 2026, your 2025-26 return, due 31 January 2027, is still under the old penalties.
Every rule here, in HMRC's words: Penalties for Making Tax Digital for Income Tax on gov.uk.
Straight answers
Is there a penalty for a late MTD quarterly update?
Not in 2026-27. HMRC has said there are no penalties for missing a quarterly update deadline in the first year. From 2027-28 each missed quarterly update deadline earns a penalty point, and a late tax return earns one in every year, including 2026-27.
How many penalty points before I get a fine?
Four. Points on their own cost nothing. When you reach 4 points you get a £200 penalty, and every deadline you miss after that brings another £200. You only get one point per deadline, even if you send updates for several businesses late.
How long do MTD penalty points last?
Below the threshold, each point is removed automatically 24 months after the deadline you missed. Once you reach 4 points they stay until you have met every deadline for 12 months and sent anything outstanding from the previous 24 months, then they all go.
What is the penalty for paying tax late under MTD?
Nothing for the first 15 days. Then 3% of what you still owe at day 15, another 3% of what you still owe at day 30, and from day 31 a yearly rate of 10% charged daily for up to 2 years. Interest is charged on top.
Can I avoid a late payment penalty?
Pay in full or set up a payment plan with HMRC within 15 days, or within 30 days in your first year of the new penalties. If you agree a payment plan and keep to it, penalties are paused. Penalties never apply to payments on account.
Do the new penalties apply to my 2025-26 return?
No, if you join Making Tax Digital in April 2026. The new penalties apply from the tax year you join, so your 2025-26 return, due 31 January 2027, is still under the old Self Assessment penalties. Your 2026-27 return is the first under the new ones.
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