What are MTD late filing penalties?

HMRC uses a points-based system. Each late quarterly update earns you 1 penalty point. Once you reach 4 points, you receive a £200 fine. Points reset after a sustained period of on-time submissions. Crucially, HMRC has confirmed that no penalties will be issued for late quarterly updates during the 2026/27 tax year, giving everyone a grace period while the system beds in. August sends smart reminders before each deadline so you never miss a submission.