Important first-year exception: HMRC will not apply penalty points to late quarterly updates for the 2026–27 tax year. You must still send all quarterly updates before submitting your tax return, and separate penalties can apply to late tax returns and payments.
After 2026–27, HMRC's points-based late-submission regime applies to quarterly updates. The current rules use a threshold rather than issuing a cash penalty for every isolated late submission, but always check the latest position on GOV.UK.
Here is how the points system works, where to check the late-payment rules that apply to you, and the habits that reduce deadline risk.
Late Submissions: The Points System
- 2026–27 quarterly updates: no penalty points are applied.
- After 2026–27: a missed quarterly update or tax-return deadline can generate a point.
- If more than one business has an update due on the same date, HMRC applies at most one point for that deadline, not one point per business.
- The published quarterly threshold is 4 points; reaching it triggers a £200 penalty.
- While you remain at the threshold, every further late submission is another £200.
- Your HMRC account is the authoritative source for your actual points and penalties.
How Points Disappear
- Below the threshold: an individual point expires automatically after 24 months.
- At the threshold: expiry stops. To reset to zero you must complete a 12-month clean streak (every submission on time) and bring all outstanding submissions up to date. Only then does the £200-per-late-filing treadmill stop.
The design intent is clear: one chaotic quarter is forgiven; a chaotic year is not.
Late Payment: A Separate (Sharper) Regime
Points cover late filing. Late payment is separate, and there is no single percentage or grace period that is safe to apply to everyone. The rules depend on the tax year, when you entered the new penalty regime, whether it is your first year, the unpaid balance and how long it remains unpaid. Late-payment interest runs from the first day.
Use HMRC's current Making Tax Digital penalty guidance and your HMRC notice or online account for the dates and amounts that apply to you. If you cannot pay in full, contact HMRC promptly about a payment plan; do not wait for a generic percentage example from an article.
Reasonable Excuse
Points and penalties can be challenged where a reasonable excuse exists — serious illness, bereavement, HMRC system failure, fire or flood. What consistently fails: "I didn't know about MTD", "my records weren't ready", "my software subscription lapsed", or relying on a third party without oversight. In other words, the excuses the penalty system was built to price in.
The Zero-Penalty Playbook
- Diarise all five dates now — 7 August, 7 November, 7 February, 7 May, 31 January — with reminders a fortnight ahead.
- Keep records continuously. Convert each quarter's bank statements to categorised spreadsheets within days of quarter-end (BankScan AI makes that a coffee-break job), so the update itself is a five-minute submission — see the quarterly cycle guide.
- Never skip a nil quarter — quiet quarters still need an update.
- If cash is tight, contact HMRC promptly — ask about a payment plan before delay increases the amount due.
- Check every income source if you run a trade and property. Each needs its own update, but HMRC applies at most one point for a shared deadline.
Prepared Records Reduce Deadline Risk
Prepare supported statements as reviewable working data and compare every row with the source. The export is not a submission-ready MTD record.
Start 7-day trial →Frequently Asked Questions
Is there a fine the first time I miss a quarterly deadline?
For 2026–27, HMRC will not apply penalty points to late quarterly updates. You must still send every update before submitting your tax return, and late-return or payment penalties can still apply. Check HMRC's current rules for later tax years.
I file for a business and a property — can I collect points twice?
You must send an update for each income source, but do not calculate a penalty balance by counting businesses yourself. Your HMRC account is the authoritative source.
How do I get back to zero once I hit four points?
Two conditions together: a full 12 months of on-time submissions, and everything outstanding actually filed. Until both are met you stay at the threshold and each further late submission costs another £200.
What does paying my tax a month late actually cost now?
There is no safe universal estimate. The timing and rate depend on the tax year, when you entered the new penalty regime, whether it is your first year, the unpaid balance and how long it remains unpaid. Late-payment interest runs from the first day. Check HMRC's current guidance or your penalty notice, and contact HMRC promptly if you need a payment plan.
Will HMRC accept 'my records were a mess' as a reasonable excuse?
No — disorganised records are precisely what the regime exists to discourage. Reasonable excuse covers events genuinely outside your control (serious illness, bereavement, HMRC outages). The reliable strategy is records that are always ready, which is an automation problem, not a willpower one.
Last updated: 30 July 2026. This guide explains the Making Tax Digital rules as published by HMRC — always check GOV.UK for the latest official penalty guidance. Read our digital record-keeping guide or browse all blog posts.