No Fines for Late Quarterly Updates in Year One. But Don't Get Complacent
HMRC won't issue penalty points for late quarterly submissions in 2026/27. We break down what that covers, what it doesn't, and why you should still file on time.
10 April 2026 · 4 min read
HMRC is cutting you some slack
If you're in the first wave of Making Tax Digital (income over £50,000), HMRC has confirmed it won't issue penalty points for late quarterly updates during the 2026/27 tax year.
That's welcome news. It means if you miss the 7 August deadline for your Q1 update, or you're a week late on Q2 in November, you won't accumulate points towards a fine.
But before you breathe too big a sigh of relief, there are some important caveats.
What the soft landing covers
- Late quarterly updates for the 2026/27 tax year only (Q1 through Q4)
- This applies to the first cohort (income over £50,000, mandated from April 2026)
Four quarterly submissions get a free pass on timing. Nothing else.
What it does NOT cover
Your final declaration (due 31 January 2028) is enforced from day one. Miss that and you will pick up a penalty point immediately. This is the year-end submission that replaces your Self Assessment return. It's the big one, and HMRC isn't giving any leeway on it.
Late payment of tax. If you owe tax and don't pay on time, the usual late payment penalties apply. Interest starts accruing from the day after the deadline. After 15 days, you'll owe 2% of the outstanding amount. After 30 days, another 2% plus a daily rate.
Deliberately incorrect returns. If you submit false information, the penalties for inaccuracy apply regardless of the soft landing.
Why you should still file on time
The soft landing is a safety net, not a strategy. Here's why treating it as permission to be late is a bad idea:
Habits. If you spend year one submitting late, you'll carry that habit into year two when the penalties are real. Four missed quarterly deadlines in 2027/28 means a £200 fine and £200 for every late submission after that.
Backlog. The longer you leave your quarterly update, the more catching up you have to do. Filing a quarterly summary when your records are current takes minutes. Reconstructing three months of transactions in the last week? Much less fun.
The overlap. In January 2027, you've got your old Self Assessment for 2025/26 due on the 31st AND your Q3 update due on 7 February. If you've been putting off your MTD updates, this window gets very cramped.
After the grace period
From the 2027/28 tax year onwards (starting April 2027), the penalty points system applies fully:
| Late submissions | Points | Penalty |
|---|---|---|
| 1st | 1 | None |
| 2nd | 2 | None |
| 3rd | 3 | None |
| 4th | 4 | £200 |
| Each one after | 4 | £200 |
You can clear your points by filing everything on time for 24 consecutive months.
Use year one wisely
Set up your software, connect your bank, submit your quarterly updates on time even though the penalties aren't live yet. By April 2027, quarterly filing should feel routine rather than stressful.
Treat year one as a practice run and you'll coast through year two. Treat it as a holiday and year two will be a rude awakening.
Need to get started? Read our guide to what MTD is or jump straight to choosing free MTD software.