What are MTD late filing penalties?

HMRC uses a points-based system. Each late quarterly update earns one penalty point, and once you reach four points you receive a £200 fine, with a further £200 for each late submission after that. How points clear depends on where you stand. Below four points, each point drops off automatically 24 months after the deadline it relates to. At or above four points, automatic expiry stops, and clearing them requires twelve consecutive months of on-time submissions plus every outstanding submission from the previous 24 months. Crucially, HMRC is not issuing penalty points for late quarterly updates during 2026/27, so a missed update in the first year carries no points. That easement covers quarterly updates only: it does not extend to the final declaration, and late payment penalties and interest apply as normal throughout. For more detail, see our guide to MTD penalties.