MTD Penalties: What Happens If You Miss a Deadline?

Making Tax Digital for Income Tax started on 6 April 2026 for people whose qualifying income — gross self-employment plus gross property income — was over £50,000 on their 2024–25 return. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028. Each year there are four cumulative quarterly updates and then a tax return (the final declaration), so there are more deadlines than before.

No penalties for late quarterly updates in 2026–27

HMRC will not charge penalties or penalty points for missing a quarterly update deadline in the 2026–27 tax year. You still need to keep digital records and send the updates before your tax return. The easement does not cover a late tax return or late payment.

The points-based system

For each quarterly update deadline you miss (from 2027–28 onwards) and each tax return deadline you miss, you get one penalty point. When you reach 4 points, you get a £200 penalty, and another £200 for each further missed deadline while you are at the threshold.

Below 4 points, a point normally expires after 24 months. At 4 points, points stop expiring automatically. To clear them you need 12 months of on-time submissions, and all outstanding submissions from the previous 24 months must be sent.

Late payment penalties

Late payment penalties are separate from penalty points and from late payment interest. For 2026–27:

• Up to 15 days late: no penalty (interest still runs)
• 16–30 days late: 3% of the tax owed at day 15
• 31 days or more late: 3% of the tax owed at day 15, plus 3% of the tax owed at day 30, plus 10% a year on the outstanding balance, charged daily

From 2027–28 the first two rates rise to 4%. Late payment interest is charged on top. If you cannot pay, contact HMRC early about a payment plan.

Deadlines for 2026–27

• 6 April – 5 July 2026: update by 7 August 2026
• 6 April – 5 October 2026 (cumulative): update by 7 November 2026
• 6 April 2026 – 5 January 2027 (cumulative): update by 7 February 2027
• 6 April 2026 – 5 April 2027 (full year): update by 7 May 2027
• Tax return (final declaration) for 2026–27: by 31 January 2028

There is no separate End of Period Statement.

Reasonable excuses

HMRC can accept a reasonable excuse for a missed deadline in genuinely exceptional circumstances, such as serious illness, the death of a close relative, or a fire or flood destroying records. "I forgot" or "I was on holiday" don't qualify.

How Tendmere keeps you on track

Tendmere prepares digital records and quarterly review packs for MTD. Production submission to HMRC is disabled until approval and live credentials are complete, so do not rely on Tendmere as a live filing route. Use HMRC-recognised compatible software or your accountant to file.