{
  "title": "Making Tax Digital for Income Tax: the penalty regime",
  "description": "The points-based late submission penalties, the late payment percentages by tax year, and the first deadline at which a penalty can actually land for each mandation wave. Compiled from HMRC guidance because HMRC does not publish the onset dates in one place.",
  "capturedOn": "15 August 2026",
  "method": "Every figure restates HMRC's own guidance 'Penalties for Making Tax Digital for Income Tax'. The mandation start dates in the onset table come from HMRC's 'Find out if and when you need to use Making Tax Digital for Income Tax'. The onset table is derived only from those two pages — the start date, the rule that new penalties apply from the tax year you join, the rule that quarterly updates for 2026 to 2027 carry no points, and the fixed 7 August / 7 November / 7 February / 7 May quarterly deadlines and 31 January tax-return deadline. No rate is inferred.",
  "source": "https://www.gov.uk/guidance/penalties-for-making-tax-digital-for-income-tax",
  "thresholdSource": "https://www.gov.uk/guidance/find-out-if-and-when-you-need-to-use-making-tax-digital-for-income-tax",
  "headline": {
    "pointThreshold": 4,
    "penaltyGBP": 200,
    "firstYearGraceDays": 30,
    "laterYearGraceDays": 15,
    "latePaymentAnnualRatePercent": 10,
    "latePaymentAnnualRateMaxYears": 2
  },
  "lateSubmission": [
    {
      "aspect": "How points are earned",
      "rule": "One penalty point for each quarterly update (for tax years after 2026 to 2027) or tax return you file after its deadline."
    },
    {
      "aspect": "The 4-point threshold",
      "rule": "Reaching 4 points triggers a £200 penalty, and a further £200 every time you miss another submission deadline after that."
    },
    {
      "aspect": "One point per deadline",
      "rule": "You get a single point per deadline even if you run more than one business and file more than one quarterly update late."
    },
    {
      "aspect": "2026 to 2027 quarterly updates carry no points",
      "rule": "There are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year — but you must still keep digital records and send the updates before you can submit your tax return."
    },
    {
      "aspect": "Separate from VAT",
      "rule": "If you are also registered for VAT, your Income Tax penalty points are counted separately from your VAT penalty points."
    },
    {
      "aspect": "Removing points below the threshold",
      "rule": "If you stay below 4 points, each point is removed automatically 24 months after the missed deadline."
    },
    {
      "aspect": "Removing points once you hit the threshold",
      "rule": "Points are no longer removed automatically. You must file every quarterly update and tax return on time for 12 months, and submit any outstanding updates and returns for the previous 24 months."
    }
  ],
  "latePayment": {
    "appliesTo": "A balancing payment left unpaid at the due date, or amounts due after an amendment or assessment. It does not apply to payments on account.",
    "firstYear": "In your first year of the new penalties you have 30 days from the due date to pay in full or set up a payment plan before penalties start. After your first year this drops to 15 days, and you only ever get the 30-day period once.",
    "interest": "Late payment interest is charged separately, from the first day your payment is late until you pay in full. HMRC has not changed how late payment interest works.",
    "schedule": [
      {
        "taxYear": "2026 to 2027",
        "upTo15Days": "No penalty",
        "days16to30": "3% of the tax owed at day 15 (no penalty if it is your first year)",
        "days31OrMore": "3% of the tax owed at day 15, plus a further 3% of the tax owed at day 30, plus an annual rate of 10% charged daily on the outstanding amount from day 31 until it is paid, for up to 2 years"
      },
      {
        "taxYear": "2027 to 2028",
        "upTo15Days": "No penalty",
        "days16to30": "4% of the tax owed at day 15 (no penalty if it is your first year)",
        "days31OrMore": "4% of the tax owed at day 15, plus a further 4% of the tax owed at day 30, plus an annual rate of 10% charged daily on the outstanding amount from day 31 until it is paid, for up to 2 years"
      }
    ]
  },
  "excludedReturns": [
    {
      "returnType": "Non-resident company return",
      "note": "Submitted on behalf of the company. Current late submission and late payment penalties still apply."
    },
    {
      "returnType": "Trust or estate return",
      "note": "Submitted by a trustee. Current penalties still apply."
    },
    {
      "returnType": "Partnership return",
      "note": "Submitted by a nominated partner. Current penalties still apply."
    }
  ],
  "onset": [
    {
      "wave": "First wave",
      "startsFrom": "6 April 2026",
      "qualifyingIncomeOver": "£50,000",
      "firstYearUnderNewPenalties": "2026 to 2027",
      "firstPenaltyBearingQuarterlyUpdate": "7 August 2027 — the first quarterly update for 2027 to 2028; every 2026 to 2027 update is penalty-free",
      "firstReturnUnderNewPenalties": "2026 to 2027 tax return, due 31 January 2028"
    },
    {
      "wave": "Second wave",
      "startsFrom": "6 April 2027",
      "qualifyingIncomeOver": "£30,000",
      "firstYearUnderNewPenalties": "2027 to 2028",
      "firstPenaltyBearingQuarterlyUpdate": "7 August 2027 — the first quarterly update for 2027 to 2028, which is after 2026 to 2027, so points apply from the start",
      "firstReturnUnderNewPenalties": "2027 to 2028 tax return, due 31 January 2029"
    },
    {
      "wave": "Third wave",
      "startsFrom": "6 April 2028",
      "qualifyingIncomeOver": "£20,000",
      "firstYearUnderNewPenalties": "2028 to 2029",
      "firstPenaltyBearingQuarterlyUpdate": "7 August 2028 — the first quarterly update for 2028 to 2029, with points applying from the start",
      "firstReturnUnderNewPenalties": "2028 to 2029 tax return, due 31 January 2030"
    }
  ],
  "caveats": [
    "There are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year. The first update that can carry a penalty point is the first update for a tax year after 2026 to 2027.",
    "Late submission penalties (points) and late payment penalties are two separate systems. Points do not turn into a fine until you reach 4; late payment penalties apply per late payment with no threshold.",
    "The new penalties do not apply to non-resident company, trust or estate, or partnership returns — the current penalties continue for those.",
    "Late payment interest is charged in addition to any late payment penalty, from the first day the payment is late. It is not a penalty and is not covered by the grace period.",
    "HMRC updates this guidance. The linked HMRC pages are the live answer if this dataset has aged."
  ],
  "licence": "CC BY 4.0",
  "attribution": "Fableworks HQ — https://fableworkshq.com/mtd-penalties/"
}