What happens if I miss the MTD deadline? Penalties explained

Missing a Making Tax Digital deadline is easier than you think — a busy summer on site, a missed email, or records that are not ready. HMRC has updated how penalties work from April 2026. Here is what you need to know in plain English.

Late submission: the points system

HMRC uses a points-based system for late quarterly updates (and other MTD submissions):

• One point for each late quarterly update
• When you reach the threshold (four points for quarterly filers), you receive a £200 penalty
• Each further late submission after that can be another £200
• Points expire after 24 months of on-time compliance — clean runs matter

Filing and paying are separate. You can file on time but pay late — or file late but pay on time. Each has different consequences.

Late payment penalties

• No penalty if you pay within 15 days of the due date
• 15–30 days late: penalty based on an annualised 4% of the amount outstanding at day 15
• 30+ days late: additional penalty at 4% annualised on the amount outstanding at day 30
• Plus interest on unpaid tax (currently Bank of England rate plus 2.5% — check HMRC for the live rate)

Quarterly deadlines (2026/27 onwards)

• Q1 (6 Apr – 5 Jul): file by 7 August
• Q2 (6 Jul – 5 Oct): file by 7 November
• Q3 (6 Oct – 5 Jan): file by 7 February
• Q4 (6 Jan – 5 Apr): file by 7 May
• Final declaration: by 31 January following the tax year

New to MTD? Read our plain English guide to Making Tax Digital.

How to avoid penalties

• Set quarterly reminders — Billdr emails you 14 and 3 days before
• File on time even if you cannot pay yet — late filing earns points; late payment earns interest
• Keep digital records as you go — reconstructing three months the night before is painful and error-prone
• Use MTD-compatible record-keeping — spreadsheets alone are not enough for the digital link rules

First-year leniency

HMRC has indicated leniency on penalties for late quarterly submissions in the first year (2026/27) while people adjust. Submissions are still required — do not treat leniency as permission to ignore deadlines entirely.

Just registered? Our sole trader setup checklist covers MTD alongside invoicing and expenses.

How Billdr helps

• Email reminders 14 and 3 days before each quarterly deadline
• MTD Filing page with your exact income and expense figures ready to copy into HMRC's free tool
• Step-by-step self-filing guide inside the app
• Dashboard showing which quarters are filed and which are due

Try Billdr free for 30 days — no card required. Use code 3MONTHSFREE for 3 months free when you continue. Start at www.billdr.co.uk.