MTD for Income Tax penalties

Late submissions earn points: 4 points means a £200 penalty. Late payments cost a percentage that grows with the delay. Both replace the current Self Assessment penalties from the tax year you join.

2026 to 2027

No points for late quarterly updates

A late tax return (due 31 January 2028) still scores a point.

From 2027 to 2028

1 point per missed deadline

Quarterly updates and tax return. One point per deadline, however many businesses.

Threshold

4 points = £200

Then £200 for each further missed deadline. Volunteers: 2 points, returns only.

Independent tool, not affiliated with HMRC. It applies the rules published on GOV.UK to the figures you enter. It is not tax advice. HMRC’s letter and your HMRC online account are the only authoritative answer; if in doubt, ask HMRC or a tax adviser.

Late payment penalties, in detail

They apply to a balancing payment, or to tax due after an amendment or assessment, not paid in full by the due date. They are not points-based: each late payment is penalised. Payments on account are excluded.

Paid	For 2026 to 2027	For 2027 to 2028
Up to 15 days late	No penalty	No penalty
16 to 30 days late	3% of the tax owed at day 15, or nothing in your first year	4% of the tax owed at day 15, or nothing in your first year
31 days or more late	3% at day 15 + 3% at day 30 + 10% a year, charged daily from day 31, for up to 2 years	4% at day 15 + 4% at day 30 + 10% a year, charged daily from day 31, for up to 2 years

In your first year under the new penalties you have 30 days (not 15) to pay in full or contact HMRC to set up a payment plan. You only get this once: someone who volunteered and is now required keeps the 15 days. Late payment interest is charged on top, from the first day, at the rate HMRC publishes (current rates).

Contacting HMRC early and agreeing a payment plan pauses penalties from the day you made contact, as long as you keep to it.

How the calculator reads the rules

GOV.UK leaves a few points open. We state our reading so you can check it:

Reset at the threshold. We count the 12 months of on-time submissions from your last missed deadline, and assume late submissions were eventually sent. HMRC shows the exact removal date in your online account.
First year, 31 days or more. The GOV.UK table only waives the penalty in the first year for payments 16 to 30 days late. For 31 days or more, we charge both penalties, as the table shows.
Daily 10%. Charged on the amount unpaid at day 30; part-payments after that are not modelled. Days are counted from the day after the due date.
Later tax years. GOV.UK publishes rates for 2026 to 2027 and 2027 to 2028 only.

Appeals

HMRC writes to you for each late payment penalty, each late submission point and each £200 penalty. The letter tells you how to appeal if you disagree. In exceptional circumstances such as insolvency, HMRC may cancel a penalty or remove points.

Questions people ask

What is the penalty for a late MTD quarterly update?

Not money straight away: 1 penalty point per missed deadline. At 4 points you get a £200 penalty, and another £200 each time you miss a further deadline while at the threshold. For the 2026 to 2027 tax year, late quarterly updates do not score points at all.

I have three businesses and sent all three updates late. Is that 3 points?

No. GOV.UK says you can only get one penalty point per deadline, even with more than one business.

How long do penalty points last?

Below the threshold, each point is removed automatically 24 months after the missed deadline. Once you reach the threshold, points are not removed one by one: all of them go once you have been on time for 12 months and have sent everything outstanding from the previous 24 months.

Are MTD penalty points shared with my VAT penalty points?

No. If you are also VAT-registered, the two sets of points are kept separately.

Do the new penalties apply to my last normal tax return?

No. The current Self Assessment penalties apply to tax years before you join. If you join on 6 April 2026, your 2025 to 2026 return (due 31 January 2027) is under the current rules.

What if I become exempt after joining?

If you become exempt during 2026 to 2027 you go back to the current Self Assessment penalties. If you become exempt in 2027 to 2028 you stay under the new penalties, because GOV.UK says they apply to everyone who submits a personal return from April 2027, but your threshold drops from 4 points to 2 and your points are reduced so you are no closer to it (3 points become 1).

Official sources

Penalties for Making Tax Digital for Income Tax — GOV.UK, last updated 30 March 2026, read 29 September 2026.
Penalties for Making Tax Digital for Income Tax volunteers — GOV.UK, last updated 12 March 2026, read 29 September 2026.
Use Making Tax Digital for Income Tax: Send quarterly updates — GOV.UK, last updated 19 May 2026, read 29 September 2026.
Use Making Tax Digital for Income Tax: Before you use this guide — GOV.UK, last updated 2 April 2026, read 29 September 2026.

Rules checked against GOV.UK on 29 September 2026.