MTD penalties: points, £200 fines and late payment charges explained
Making Tax Digital for Income Tax comes with new penalties: points for missed deadlines instead of instant fines, and late payment charges that grow the longer you wait. Here is how they work, what is different in 2026 to 2027, and two calculators to see where you stand.
Late submission: the points system
| What earns a point | Each missed quarterly update deadline (for tax years after 2026 to 2027) and each missed tax return deadline |
|---|---|
| More than one business | Still 1 point per deadline, even if you send several updates late |
| Threshold | 4 points |
| Penalty | £200 when you reach 4 points, then £200 for each further missed deadline |
| Points below the threshold | Removed automatically 24 months after the missed deadline |
| Back to zero after the threshold | Send all updates and returns on time for 12 months, and send anything outstanding from the previous 24 months |
| VAT | MTD for Income Tax points are separate from VAT penalty points |
2026 to 2027: the soft year for quarterly updates
There are no penalties for missing a quarterly update deadline in the 2026 to 2027 tax year. You still have to keep digital records and send all your quarterly updates before you can submit your tax return. A late 2026 to 2027 tax return still earns a point. From the 2027 to 2028 tax year, every late quarterly update counts.
Points simulator
Which deadlines do you miss this year?
0 points · £0 in late submission penalties
Late payment penalties
They apply to tax not paid in full by the due date — balancing payments and amounts from amendments or assessments — but not to payments on account.
| How late | 2026 to 2027 | 2027 to 2028 |
|---|---|---|
| Up to 15 days | No penalty | No penalty |
| 16 to 30 days | 3% of the tax owed at day 15 | 4% of the tax owed at day 15 |
| 31 days or more | 3% at day 15, 3% at day 30, plus 10% a year on what is still owed, from day 31 until paid (for up to 2 years) | 4% at day 15, 4% at day 30, plus 10% a year from day 31 (for up to 2 years) |
Your first year: HMRC gives you 30 days from the due date before late payment penalties apply, once only. Late payment interest is separate: it runs from the first day a payment is late. If you cannot pay, contact HMRC early about a Time to Pay arrangement.
Late payment estimate
£0 estimated penalty
Never miss a deadline
The free check gives you every MTD deadline that applies to you, ready to add to your calendar.
Not using MTD yet? The current Self Assessment penalties
| Late tax return | Penalty |
|---|---|
| 1 day late | £100 |
| After 3 months | £10 a day, up to £900 |
| After 6 months | 5% of the tax due or £300, whichever is greater |
| After 12 months | Another 5% or £300, whichever is greater |
Late payment outside MTD: 5% of the unpaid tax at 30 days, 6 months and 12 months, plus interest.
How to stay at zero points
- Put the deadlines in your calendar: 7 August, 7 November, 7 February, 7 May and 31 January. Our check exports them.
- Send something on time. Each update covers the tax year so far, so you can correct figures in the next one instead of missing a deadline.
- Read HMRC's letters. You get a letter for each point and each penalty; it explains how to appeal if you disagree.
- Check if you are exempt before you start: MTD exemptions.
Questions
How many penalty points before an MTD fine?
4 points. When you reach 4 you get a £200 penalty, and another £200 for every deadline you miss after that.
Do MTD penalty points expire?
Yes, while you are below the threshold: each point is removed 24 months after the missed deadline. Once you reach 4, you need 12 months of on-time submissions and must send anything outstanding from the previous 24 months.
Is there a penalty for a late quarterly update in 2026 to 2027?
No. There are no penalties for late quarterly updates in the 2026 to 2027 tax year, but you must still send them before your tax return, and a late tax return earns a point.
How much is the MTD late payment penalty?
Nothing for the first 15 days. Then 3% of the tax owed at day 15 (4% from 2027 to 2028), the same again at day 30, and 10% a year on what is still unpaid from day 31.
Do late payment penalties apply to payments on account?
No. They apply to balancing payments and to amounts due after amendments or assessments.
All MTD dates and thresholds · How to sign up for MTD · Compare MTD software
Sources (checked 9 October 2026): GOV.UK — penalties for Making Tax Digital for Income Tax (updated 30 March 2026), Self Assessment tax returns: penalties. The calculators are estimates: they assume nothing is paid before the date you enter and do not include late payment interest. HMRC's letters are the reference. This is guidance, not tax advice.