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Four points costs £200. When do yours land?
The soft landing sounds generous and is the trap: the year in which nothing happens is the year the habit forms. And it belongs to the 2026–27 tax year, not to you, so a landlord who joins in April 2027 starts with points from the first quarter.
The short answer
Making Tax Digital for Income Tax gives one penalty point per missed deadline — a quarterly update or the tax return — and at four points a £200 penalty, then £200 for each further miss. Below four, each point expires 24 months after the deadline. Late quarterly updates earn no points in the 2026–27 tax year. Enter your misses and any late payment, and this returns your points, what is left before £200, and the payment penalty alongside.
On this page · 5 sections
Two separate clocks run here and people routinely confuse them. Late filing earns points. Late payment earns a percentage, on a different and harsher schedule, and no amount of good filing protects you from it.
Your numbers
Opens on a worked example, not an industry average. Replace every figure with your own — there is no such thing as a default here.
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Show the working
Why the free year is the risk
A landlord who files a quarterly update three weeks late in 2026–27 experiences nothing. The system appears to tolerate it. From April 2027 the identical behaviour earns a point each time, and with four updates a year the threshold can be reached inside twelve months.
The habit formed during the forgiving year is the habit that produces the penalty. And the forgiving year belongs to the tax year, not the taxpayer: the landlords brought in by the £30,000 threshold in April 2027 never get one.
For agents
The landlords most likely to miss a deadline are the ones waiting on you for figures. That is not your legal problem and it is squarely your commercial one.
Questions people actually ask
How many penalty points before a fine under MTD?
Four. You get one point for each missed deadline — a quarterly update or the tax return — and at four points a £200 penalty, then another £200 for every deadline missed after that. Below four, each point is removed 24 months after the deadline that caused it.
Are there penalties in the first year of Making Tax Digital?
No points are given for late quarterly updates in the 2026–27 tax year, but a late tax return still earns one. The easement is tied to that tax year, not to your first year, so someone who joins in April 2027 gets points from their first quarter. For late payment, your first year under the new penalties gives you 30 days before a penalty rather than 15.
How are MTD late payment penalties calculated?
For 2026–27: nothing for the first 15 days (30 in your first year), then 3% of the tax owed at day 15; from day 31, 3% of the tax owed at day 30 as well, plus 10% a year on whatever is still outstanding, charged daily until it is paid or for up to two years. For 2027–28 the two fixed penalties rise to 4% each.
Does part-paying help?
Yes, if done early. Each fixed penalty is a percentage of what is outstanding on that day, and the 10% a year runs on the balance, so reducing it reduces all three. The first fifteen days carry no penalty at all and are a genuine grace period rather than something to panic through.
Sources
- HM Revenue & Customs, “Penalties for Making Tax Digital for Income Tax”, published 12 March 2026, last updated 30 March 2026: “There are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year”; “For each quarterly update (for tax years after 2026 to 2027) or tax return deadline you miss, you’ll get a penalty point”; at 4 points a “£200 penalty” and a “£200 penalty each time you miss another submission deadline”; below the threshold each point removed “24 months after the missed deadline”. Late payment for 2026–27: “3% of the tax owed at day 15, and 3% of the tax owed at day 30”, plus “an annual rate of 10% per year on the outstanding amount, charged daily from day 31 until the tax is paid, or for up to 2 years”; for 2027–28, 4% and 4%; in the first year of new penalties, 30 days before penalties apply rather than 15. gov.uk ↗ — primary; the tax authority’s own guidance re-checked every 6 months
- ICAS, “Making Tax Digital: Penalties”, read 23 September 2026 — the accountancy body’s summary this tool was first built from. Its “No penalty points will be issued for late quarterly updates submission for the first year of MTD” is narrower on HMRC’s page, which ties the easement to the 2026–27 tax year; its “If you receive a second late payment penalty, an additional annual penalty of 10% per year applies” describes the charge HMRC applies to anything unpaid after day 30. icas.com ↗ — secondary; superseded here by HMRC’s own guidance above re-checked every 6 months
- The Finance Act 2021 (Increase in Schedule 26 Penalty Percentages) Regulations 2025, SI 2025/589, made 13 May 2025, in force 31 May 2025: in the late payment penalty rules “for ‘2%’ substitute ‘3%’” and “for ‘4%’ substitute ‘10%’”. We could not find on legislation.gov.uk the instrument behind HMRC’s 4% rates for 2027–28. legislation.gov.uk ↗ — primary; the legislation behind the 2026–27 rates re-checked every 6 months
- HMRC, “Find out if and when you need to use Making Tax Digital for Income Tax”, last updated 26 March 2026 — the thresholds and start dates these penalties attach to. gov.uk ↗ — primary for scope re-checked every 6 months
- This models a 2026–27 bill with the same tax outstanding throughout. It does not model appeals, reasonable excuse, payment plans, or the 2-point threshold for anyone who becomes exempt in 2027–28, all of which matter in a specific case. We are not accountants and this is not tax advice. — a stated limit on this tool
- Nothing entered here leaves the page. — first-party, and enforced by the build
Checked 24 September 2026. Next scheduled check 23 March 2027. Numbers that move — leaderboards, live indices — are re-checked every 30 days; annual datasets and rules in force every six months; dated research once a year. If something here has gone stale before we got to it, tell us and we will correct it and say what changed.
The landlords who file late are the ones waiting on you.
Four times a year, on HMRC’s schedule rather than yours, every landlord in scope needs categorised figures. We build the pipeline that sends them unprompted and logs what went to whom and when — which removes the commonest excuse and the commonest phone call together.
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