19 October 2026

MTD for Income Tax penalty points

Late 2026/27 quarterly updates earn no points. A late 2026/27 tax return still earns one, and the first quarterly deadline that can earn a point is 7 August 2027 on RecordsIn's derived reading of HMRC's rules.

First quarterly deadline that can earn a point. 7 August 2027 (update 1 of 2027/28). The 7 May 2027 update belongs to 2026/27, so it carries no point.

That date is derived. It is not an HMRC statement.

See GOV.UK, Penalties for MTD for Income Tax.

It is not tax advice. Check current GOV.UK guidance before you brief clients.

The 2026/27 easement

These are the easement rules for 2026/27.

2026/27 easement: no points for late quarterly updates. It covers all four 2026/27 updates.

See GOV.UK, Penalties for MTD for Income Tax and GOV.UK, Use MTD for Income Tax: Send quarterly updates.

The 2026/27 return still earns a point if late.

See GOV.UK, Use MTD for Income Tax: Send quarterly updates.

Updates are still owed during the easement.

See GOV.UK, Penalties for MTD for Income Tax.

How points work from 2027/28

From 2027/28, a missed deadline can earn a point under these rules.

One point per missed deadline. The point applies to each quarterly update (tax years after 2026/27) and each return.

See GOV.UK, Penalties for MTD for Income Tax.

Only one point per deadline, however many businesses.

See GOV.UK, Penalties for MTD for Income Tax.

Threshold. The threshold is 4 points.

See GOV.UK, Penalties for MTD for Income Tax.

Fine at the threshold. The fine is £200, then £200 for each later missed deadline.

See GOV.UK, Penalties for MTD for Income Tax.

Expiry below the threshold. Below the threshold, each point is removed 24 months after the missed deadline.

See GOV.UK, Penalties for MTD for Income Tax.

Reset at the threshold. Points reset after 12 months of on-time filing, plus everything outstanding for the previous 24 months sent.

See GOV.UK, Penalties for MTD for Income Tax.

Separate from VAT points.

See GOV.UK, Penalties for MTD for Income Tax.

Volunteers

A volunteer follows two further rules.

Volunteers: no penalties for late updates.

See GOV.UK, Use MTD for Income Tax: Send quarterly updates.

Volunteers: return threshold is 2 points.

See GOV.UK, Use MTD for Income Tax: Send quarterly updates.

Worked example

This table is an example for one mandated client. The client's first MTD year is 2026/27. The client misses every deadline in 2026/27 and 2027/28.

New penalties start from the tax year the client joins MTD, and earlier years stay on the old penalties.

See GOV.UK, Penalties for MTD for Income Tax.

RecordsIn counts the points in date order. The figures are an estimate.

HMRC writes for each point or penalty, and the client can appeal.

See GOV.UK, Penalties for MTD for Income Tax.

No point in this example has reached the expiry. Expiry below the threshold. Below the threshold, each point is removed 24 months after the missed deadline.

The client misses every deadline, so this reset does not apply. Reset at the threshold. Points reset after 12 months of on-time filing, plus everything outstanding for the previous 24 months sent.

This example does not model exemptions, appeals, or late payment.

What to tell clients

When you write to a client about a late 2026/27 quarterly update, say the update is still owed and earns no penalty point. When you write about a late 2026/27 tax return, say the return still earns one point. When you name a quarterly deadline on or after 7 August 2027, say a late update can earn a point. Quote the threshold as 4 points and the fine as £200, then £200 for each later missed deadline. Say these points are separate from VAT points.

Sources

• GOV.UK, Use MTD for Income Tax: Send quarterly updates
• GOV.UK, Penalties for MTD for Income Tax

Go to the RecordsIn home page.