Making Tax Digital for Income Tax is being introduced in phases for sole traders and landlords. You may need to use it from 6 April 2026 if your qualifying income from self-employment and property was over £50,000 in the 2024–25 tax year, from 6 April 2027 if it was over £30,000 in the 2025–26 tax year, and from 6 April 2028 if it was over £20,000 in the 2026–27 tax year. Some people may be exempt, so it is worth checking HMRC's guidance on whether and when you need to use MTD for Income Tax.
If you miss an MTD deadline, the consequences depend on which obligation you miss and which tax year you are in. For taxpayers who are required to use MTD for Income Tax from 6 April 2026, HMRC says there are no penalties for missing a quarterly update deadline in the 2026–27 tax year. However, that does not mean there are no penalties at all under MTD. You still need to keep digital records and send your quarterly updates before you can submit your tax return. HMRC explains this as an easement for the first year, not an exemption from the regime.
The quarterly update deadlines are 7 August, 7 November, 7 February and 7 May. So, if you are in MTD from April 2026 and miss one of those quarterly deadlines during 2026–27, you will not receive a penalty point for that missed quarterly update. That first-year easement applies only to late quarterly updates. It does not remove penalties for a late tax return or for paying tax late.
From tax years after 2026–27, HMRC's late submission system becomes points-based for quarterly updates and tax returns. Each missed deadline gives you one penalty point. The threshold is 4 points. Once you reach that threshold, HMRC charges a £200 penalty, and each further missed submission deadline can trigger another £200 penalty.
Your year-end obligation is your tax return, not just a quarterly update. Under MTD for Income Tax, the tax return must be submitted by 31 January following the end of the relevant tax year. For example, for the 2026–27 tax year, the deadline is 31 January 2028. HMRC's guidance on submitting your tax return is a useful reference point, although the penalties position for people mandated from April 2026 is set out most clearly on HMRC's guidance on the penalties for Making Tax Digital for Income Tax.
It is also important to separate late filing from late payment. Quarterly updates do not create a tax payment due every quarter, but your tax bill is still due by 31 January after the end of the tax year. HMRC says late payment interest still applies in the normal way. It also applies late payment penalties under the new regime. In your first year of the new penalties, you generally have 30 days from the due date to pay in full or contact HMRC to agree a payment plan before penalties are charged.
Penalty points do not stay on your record forever. If you are below the 4-point threshold, each point is removed automatically 24 months after the missed deadline. If you have already reached the threshold, your points are only cleared once you have met both conditions: you must send your quarterly updates and tax return on time for 12 months, and you must also submit any outstanding quarterly updates and tax returns for the previous 24 months.
If you do miss a deadline, the best approach is to deal with it quickly. Submit the outstanding update or tax return as soon as you can, and if you cannot pay on time, contact HMRC promptly to discuss a payment plan. HMRC says penalties can be paused from the date you contact them if a payment plan is agreed and you keep to it. If HMRC issues a penalty point or penalty and you disagree, you can appeal.
For taxpayers who are required to start MTD for Income Tax from 6 April 2026, missing a quarterly update in the 2026–27 tax year does not trigger a penalty point. However, that is a limited easement, not a blanket exemption from penalties. You still need to file the update, submit your tax return on time, and pay any tax due by the deadline. From later tax years, missed quarterly updates and missed tax return deadlines can lead to penalty points and £200 penalties once the threshold is reached.