How penalty points work

If you send something late, HMRC treats late submission separately from late payment. This section is about late submission only — quarterly updates and your tax return. The 2026 to 2027 tax year has a special grace period for quarterly updates if you first had to join on 6 April 2026.

What happens when you miss a deadline

HMRC's late submission rules are points-based. Each missed submission deadline usually adds 1 penalty point. If you have quarterly obligations, the threshold is 4 points. The first few missed deadlines may not create an immediate cash penalty, but the points still build up.

Key Rules to Remember

• One point per deadline: If you have two trades and a property business and miss all three quarterly submissions for the same deadline, you get one point, not three.
• Separate from VAT: MTD-IT points are entirely separate from MTD-VAT points.