What are the new late payment penalties under MTD?

Checked against GOV.UK on 14 August 2026 · Applies from 6 April 2026 onwards.

“many of those have no understanding of what is meant by: 'first, you'll need to access HMRC online services'”

We hear this most. an accountant, about the people nobody is helping, AccountingWEB Any Answers, 28 August 2026 — someone in the same position as you.

Short answer
Nothing up to 15 days late. Then 3% at day 15, 3% again at day 30, plus 10% a year charged daily from day 31.

The date you missed is gone. These are the ones still ahead of you. Your next quarterly update is due 7 November 2026, and because updates are cumulative it covers 6 April to 5 October 2026 — so it also catches up 7 August 2026 if you missed it. Your tax return for 2026 to 2027 is due 31 January 2028, and that one is still in the points system. And from September 2026 HMRC has been signing people up itself, in stages, if they had not signed up.

You are not alone, and this is the measured version of that sentence. HMRC put 864,000 sole traders and landlords in scope for this tax year (HMRC, 5 February 2026), and reported on 12 August 2026 that 436,000 had sent a first quarterly update and 570,000 had signed up. We have not subtracted one from the other to make a "how many are behind" headline — they were published six months apart and count different things — but you can see the size of the room you are standing in.

What to do tonight

half an hour, tonight, and none of it costs anything

  1. Stop worrying about the fine. There are no penalty points for a late quarterly update in the 2026 to 2027 tax year — that is HMRC's published position, not an interpretation.
  2. Sign in to your HMRC online account and look at the quarterly updates listed there. If HMRC signed you up itself, your overdue and upcoming updates are on that screen, which is faster than working them out.
  3. Diary 7 November 2026. Updates are cumulative, so that one submission covers 6 April to 5 October 2026 and catches up the one you missed in the same go.

None of those three steps costs money. Anyone charging you to do them is selling you something HMRC gives away.

Where these come from, on GOV.UK: quarterly updates and their deadlines · the tax return · who has to use MTD, and when · working out qualifying income · the recognised-software finder · what to do if HMRC signed you up.

The free route, before anyone sells you a subscription

HMRC publishes the official list of software recognised for Making Tax Digital for Income Tax, and its own guidance says plainly that “free products are available for those with simple tax affairs”. We drove that finder ourselves on 1 September 2026 and it returns recognised products costing £0 — for sole traders and for landlords, including bridging tools that submit straight from a spreadsheet you already keep. We take no commission from any of them, we rank none of them, and this site carries no affiliate links.

HMRC's official software finder (gov.uk) · how bridging software works · the free two-number check · your own four dates

Signing up for Making Tax Digital is free at GOV.UK. So is the checker on this page, and so is every answer on this site.

Late payment penalties changed at the same time as late filing, and they are not points based — each late payment is charged on its own. The percentages step up in the second year.

The table

How late the payment is2026 to 2027 tax year2027 to 2028 tax year
Up to 15 days lateNo penaltyNo penalty
16 to 30 days late3% of the tax owed at day 15, or no penalty if it is your first year4% of the tax owed at day 15, or no penalty if it is your first year
31 days or more late3% at day 15 and 3% at day 30, plus an annual rate of 10% charged daily from day 31 until paid, for up to 2 years4% at day 15 and 4% at day 30, plus an annual rate of 10% charged daily from day 31 until paid, for up to 2 years

What they apply to

Late payment penalties apply to amounts not paid in full by the due date, including a balancing payment on your tax bill and amounts due after an amendment or assessment. They do not apply to payments on account.

Interest is separate

From the first day your payment is late, until you pay in full, HMRC also charges late payment interest. MTD did not change how late payment interest works.

Contacting HMRC pauses the clock

If you cannot pay, contact HMRC as soon as possible about a payment plan. If a plan is agreed and you keep to it, penalties are paused from the date you got in touch. You may still be charged if a plan cannot be agreed, or if you do not follow the plan you agreed.

General information about UK tax rules, not tax advice. Your own circumstances and HMRC's official guidance govern your position. If you are unsure, speak to an accountant or contact HMRC.

Questions people ask

Do MTD late payment penalties apply to payments on account?

No. They apply to balancing payments and amounts due after an amendment or assessment, not to payments on account.

How much is the MTD late payment penalty?

Nothing up to 15 days. For 2026 to 2027: 3% of the tax owed at day 15, 3% again at day 30, and an annual rate of 10% charged daily from day 31 for up to 2 years.

Andrew at Axion Labs

If you've missed a deadline, start here: nothing has gone wrong that can't be fixed this week. Late quarterly updates carry no penalty points this tax year, and because the updates are cumulative, one submission catches up the one you missed. The bit I'd rather you didn't skip is the tax return date — that one isn't waived, and it's the part getting lost in the retelling.

Sources

General information about UK tax rules, not tax advice. Your own circumstances and HMRC's official guidance govern your position. If you are unsure, speak to an accountant or contact HMRC. Tax rules change — if this page is more than a few months old, check the GOV.UK pages linked above. Found an error? Email hello@getaxionlabs.com and we will correct it.

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