Making Tax Digital penalties
Missing an MTD submission earns one penalty point. At four points you are fined £200, and £200 again for every further miss. Points expire after 24 months of full compliance. Late payment penalties are separate: 3% of the unpaid tax at 15 days, another 3% at 30 days, then 10% annualised.
The points system
HMRC replaced automatic fines with points to avoid punishing a one-off slip. You get a point each time you miss a submission deadline, and you only pay once you reach the threshold.
For quarterly MTD filers the threshold is four points. Reach it and you pay £200. Every subsequent late submission is another £200, with no further points needed.
| Submission frequency | Points threshold | Penalty at threshold |
|---|---|---|
| Quarterly (MTD) | 4 points | £200 |
| Annual | 2 points | £200 |
How points expire
Points expire individually after 24 months if you stay below the threshold. Once you have hit the threshold and been fined, you have to serve a full period of compliance: 12 months of submitting everything on time for quarterly filers, and have all outstanding submissions filed, before the slate is wiped.
Late payment penalties are separate
Being late to pay is treated entirely separately from being late to file.
| How late | Penalty |
|---|---|
| Up to 15 days | No penalty if paid or a plan agreed |
| 16 to 30 days | 3% of the tax outstanding at day 15 |
| 31 days or more | A further 3% of the tax outstanding at day 30 |
| From day 31 onwards | An additional 10% a year, accruing daily |
Late payment interest runs on top of all of this, at the Bank of England base rate plus 4%.
This guide is general information, current at 9 November 2026. Tax rules change and depend on your circumstances. Please take advice before acting on it.