MTD penalties: quarterly updates vs the tax return

General information, not tax advice. This site explains published HMRC rules in plain English. It is not personal tax advice and we are not affiliated with HMRC. Check with HMRC or a qualified accountant before you act. Figures were checked against gov.uk on 5 November 2026.

From the tax year you join Making Tax Digital for Income Tax, new late submission and late payment penalties replace the older Self Assessment ones for your personal return. Source: Penalties for Making Tax Digital for Income Tax (gov.uk, updated 30 March 2026; checked 5 November 2026).

2026 to 2027 soft landing on quarterly updates

For the 2026 to 2027 tax year, HMRC will not apply penalty points for missing a quarterly update deadline. You still must keep digital records and send the quarterly updates before software will let you submit the tax return. Penalty points can still apply if the tax return itself is late (gov.uk; also restated on Send quarterly updates).

Quarterly deadline dates remain 7 August, 7 November, 7 February and 7 May — see calendar.

Late submission points (after 2026–27 for quarterly updates)

From later years, missing a quarterly update deadline or the tax return deadline can give you a penalty point. For people who are required to use MTD, the threshold is 4 points. At 4 points you get a £200 penalty, then another £200 each time you miss another deadline. You only get one point per deadline even if you have several businesses (gov.uk).

Points below the threshold are removed automatically 24 months after the missed deadline. Once you hit the threshold, clearing points needs a period of on-time filings plus catching up older outstanding submissions — read the full rules on gov.uk.

Late payment penalties

Late payment penalties are separate and are not points-based. They depend on how long the tax stays unpaid after the due date (normally 31 January after the tax year). In your first year under the new rules you generally have 30 days to pay in full or agree a payment plan before these penalties start; afterwards that cushion shortens to 15 days. Percentages and daily charges are set out in the table on gov.uk. Late payment interest can also apply.

If you cannot pay on time, gov.uk says to contact HMRC promptly about a payment plan — that can pause penalties from the date you get in touch if a plan is agreed.

Volunteers

If you volunteer for MTD before you are required, different point thresholds apply (including no quarterly-update penalties while volunteering, with a lower threshold for late returns). Use HMRC’s volunteer-specific guidance linked from the main penalties page.

Related: first-year timetable · deadlines explained · checker

Last checked against gov.uk: 5 November 2026.