Late submissions: a points system
- Each late quarterly update or final declaration earns 1 penalty point.
- For quarterly submitters, reaching 4 points triggers a £200 penalty – and another £200 for each further late submission while you are at the threshold.
- Points expire after a period of submitting on time (and all your outstanding submissions being made).
Late payment
| Tax still unpaid | Penalty |
|---|---|
| Day 15 | 3% of the tax unpaid at day 15 |
| Day 30 | Another 3% of the tax unpaid at day 30 |
| From day 31 | 10% a year on the outstanding amount |
Interest is charged on top. Agreeing a Time to Pay arrangement with HMRC early can stop penalties building up.
First year: HMRC has said there are no penalties for a late quarterly update for the 2026 to 2027 tax year. The updates are still required, and points for late quarterly updates apply from the 2027 to 2028 tax year – the first year for the £30,000 group. Rules can change – check gov.uk for the current position.
The simplest protection
Most penalties come from forgetting, not from being unable to pay. Keeping records weekly, or having an accountant who files for you, removes almost all of the risk.
Sources
- Find out if and when you need to use Making Tax Digital for Income Tax – GOV.UK
- Work out your qualifying income for Making Tax Digital for Income Tax – GOV.UK
- Send quarterly updates using Making Tax Digital for Income Tax – GOV.UK
- Find software that works with Making Tax Digital for Income Tax – GOV.UK
- Penalties for Making Tax Digital for Income Tax – GOV.UK
General information about HMRC’s Making Tax Digital rules as of 26 October 2026, not tax advice. MTD Match is not affiliated with HMRC.