MTD penalties and the first-year soft landing, plainly

MTD’s penalty system is points-based, like a driving licence in reverse: a late submission earns a point, and enough points earn a £200 penalty. But the first year is softer: 2026-27 brings no penalty points for a late quarterly update.

Will I be fined for a late quarterly update in 2026-27?

No. For the 2026-27 tax year, HMRC is not issuing penalty points for late quarterly updates (HMRC’s penalty guidance (opens in a new tab) confirms it). If you’ve already missed one: file it as soon as you can, and you’re square. No fine, no point, no phone call needed.

How do MTD penalty points work?

• Each late quarterly update earns one penalty point.
• At 4 penalty points, HMRC charges a £200 penalty, and each further late submission while you sit at 4 points charges another £200.
• A penalty point expires 24 months after the missed deadline, provided you stay below the 4-point threshold, so one bad quarter doesn’t follow you forever.

When do penalty points for quarterly updates start?

With the 2027-28 tax year. The waiver is written by tax year: HMRC’s penalty guidance (opens in a new tab) gives it to quarterly updates for 2026-27, which is all four of them, and the last of those is due 7 May 2027. So the first quarterly deadline that can earn a point is 7 August 2027, the one covering 6 April to 5 July 2027. HMRC’s announcement of 12 August 2026 (opens in a new tab) puts it as points applying from 6 April 2027 onwards, which is the same line drawn from the other side. Thresholds and penalty rules can change at a Budget, and we update this guide the same week anything does.

Which MTD deadline never had a soft landing?

The year-end final declaration, first due 31 January 2028 for 2026-27. A late one earns a penalty point, not the old automatic £100 fine, and the tax is due the same day: interest runs on anything unpaid from the first day. Put every date in your calendar from the deadlines page.