It is essential to keep onto top of your bookkeeping for Making Tax Digital (MTD) as if quarterly filings for Income Tax are late then penalties will accrue
This is how the MTD penalty points system works
Missing a deadline: Each time you submit a return late, you get one penalty point
Your penalty threshold depends on how often you submit returns:
Annual submissions: 2 points = £200 penalty
Quarterly submissions: 4 points = £200 penalty
Once you reach a threshold, you’ll pay a £200 fine. If you continue to submit late while at the threshold, you’ll pay £200 for each additional late submission.
Currently (at the time of writing) the penalty regime won’t be enforced in 2026/27
Points are reset to zero if:
- all submissions have been made on or before the due date for the following periods:
- 24 months for taxpayers with an annual filing obligation; or
- 12 months for taxpayers with a quarterly filing obligation; and
- all submissions that were due in the preceding 24 months have been received by HMRC.
