Making Tax Digital
No, you will not be fined for missing the 7 August MTD deadline
· 8 min read · Position confirmed against GOV.UK guidance updated 30 March 2026
Will you be fined for missing the 7 August deadline?
No. HMRC has waived late-filing penalties for MTD quarterly updates for the whole of the 2026-27 tax year. The guidance is unambiguous, and it is worth reading in HMRC's own words rather than anyone else's.
“There are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year.”
The easement was announced at the November 2025 Budget, and it applies to the April 2026 cohort only: the landlords and sole traders brought in at the £50,000 threshold. Anyone mandated later gets no equivalent. The £30,000 cohort joining in April 2027 and the £20,000 cohort joining in April 2028 have no penalty-free first year. This is not a general amnesty, and it is not a reason to ignore the deadline. It is a recognition that the first year of a new filing regime will be messy.
So why does half the internet say £200?
Because the £200 figure is real, and the points-based regime behind it is real. Both are just being applied to the wrong year. Under the Finance Act 2021 regime, quarterly filers accrue one point per missed deadline, and on reaching a threshold of four points HMRC charges £200, plus a further £200 for every subsequent late submission. That is what awaits you in 2027-28. It is not what happens on 8 August 2026.
The confusion is widespread. Accountancy firms, comparison sites and software vendors are actively contradicting each other on this in public right now, and a landlord searching for a straight answer will find both versions with roughly equal confidence behind them.
The £200 figure is easy to inherit. It gets repeated from one guide to the next, each writer reasonably assuming the last one checked. Almost nobody goes back to the source. That is the whole reason we cite GOV.UK directly here and stamp every claim with a date: on a rule this new, a confident figure without a citation behind it is worth nothing.
What the waiver does not cover
This is the part that matters, and it is the part most coverage skips. The waiver is narrow. Three things sit outside it.
1. The updates are still mandatory
No penalty is not the same as no obligation. The quarterly update obligations remain a legal requirement, and HMRC will not let you submit your tax return until they are met. Because the updates are cumulative, a later one satisfies the earlier ones: HMRC says filing the second update by 7 November satisfies the obligations for both the first and second quarters. So skipping a quarter does not save you the work. It moves it, and it will cost you a point once the waiver ends.
2. Your tax return is outside the waiver
The waiver covers quarterly updates only. Miss your tax return, due 31 January 2028, and you pick up a penalty point immediately, under the same points regime that starts applying to quarterly updates from 2027-28.
3. Late payment still costs you
This is the risk that survives the waiver, though note when it actually bites. The penalties apply to your balancing payment, not to payments on account, and your balancing payment for 2026-27 is not due until 31 January 2028. Filing late is free this year. Paying late is not, whenever it falls due.
What does paying late actually cost in 2026-27?
Nothing for the first 15 days. After that it escalates quickly. The percentages below apply to the tax still outstanding at each point.
The first-year easement does reach late payment, partly. In your first year in the new penalty system HMRC gives you 30 days rather than 15 before the first late-payment penalty bites. You only get that once. After day 30 the penalties are the same as everyone else's, and late-payment interest at the Bank of England base rate plus 4% runs from the original due date regardless.
When are the 2026-27 quarterly deadlines?
Four updates and a tax return. There is a wrinkle here that trips almost everyone up, so the table shows both halves of it.
| Update | Quarter, as HMRC labels it | Figures you actually submit | Deadline |
|---|---|---|---|
| Update 1 | 6 Apr to 5 Jul 2026 | 6 Apr to 5 Jul 2026 | 7 August 2026 |
| Update 2 | 6 Jul to 5 Oct 2026 | 6 Apr to 5 Oct 2026 | 7 November 2026 |
| Update 3 | 6 Oct 2026 to 5 Jan 2027 | 6 Apr 2026 to 5 Jan 2027 | 7 February 2027 |
| Update 4 | 6 Jan to 5 Apr 2027 | 6 Apr 2026 to 5 Apr 2027 | 7 May 2027 |
| Tax return | Full tax year | Full tax year | 31 January 2028 |
HMRC's consumer guidance labels the quarters discretely, so you will see “6 July to 5 October” written down in official places. But the figures you submit are always cumulative from 6 April. Both are true, and the gap between them is where most of the confusion in this regime lives. If you elect calendar update periods, the data periods shift but the deadlines do not move.
The thing that trips people up: the figures are cumulative
Every quarterly update is a running year-to-date total, not a figure for that quarter alone. Your Q2 submission restates everything from 6 April, and it overwrites Q1.
This is the single most misunderstood mechanic in MTD, and it is good news. It means a mistake in Q1 does not need an amendment. You simply file the correct year-to-date totals in Q2 and the earlier figure is replaced. There is no separate correction process, because the design does not need one.
It also means a Q2 figure that looks alarmingly large is usually correct. It is not three months of rent. It is six.
What you should actually do before 7 August
Treat this year as the rehearsal it is meant to be. The penalty-free window exists so you can find out what breaks while it is cheap to find out.
- File Q1 anyway, and file it on time. The point of a free year is to discover the problems now, not in 2027 when they cost £200 each.
- Check you are actually mandated. Qualifying income is gross rents before expenses, tested against your 2024-25 return. £55,000 of rent and £10,000 of profit puts you in scope.
- Pay on time regardless. Late payment is the risk that survives the waiver, and it carries interest as well as penalties.
- Report mortgage interest quarterly, but do not expect relief on it yet. Residential property finance costs are a named quarterly category, while the 20% tax reducer is only applied at the Final Declaration.
Common questions
Will I be fined if I miss the 7 August 2026 MTD deadline?
No. HMRC has confirmed there are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year. The waiver was announced at the November 2025 Budget. The quarterly update is still mandatory, and late payment of tax still carries penalties.
Do I still have to file the quarterly update if there is no penalty?
Yes. The quarterly update obligations remain a legal requirement, and HMRC will not let you submit your tax return until they are met. Because the updates are cumulative, a later update satisfies the earlier ones: HMRC confirms that submitting the second update by 7 November satisfies the obligations for both the first and second quarters. Skipping a quarter does not remove the work, it moves it, and it will cost you a penalty point once the waiver ends.
What penalties do still apply in 2026-27?
Late payment penalties, plus late payment interest. Nothing is charged if you pay within 15 days. Pay 16 to 30 days late and the penalty is 3% of the tax owed at day 15, although in your first year in the new penalty system HMRC gives you 30 days instead of 15, so there is no penalty if you pay within 30 days. Pay 31 days or more late and you get 3% of the tax owed at day 15, plus 3% of the tax owed at day 30, plus a further penalty accruing daily at an annual rate of 10% on the amount still outstanding. Separately, late payment interest runs from the original due date at the Bank of England base rate plus 4%. The tax return is also outside the quarterly-update waiver.
When do MTD penalty points actually start?
Points for missed quarterly updates begin from the 2027-28 tax year for the April 2026 cohort. But a missed tax return deadline earns a penalty point immediately, even in 2026-27. The threshold is 4 points, each missed deadline is 1 point, and reaching the threshold triggers a £200 penalty plus a further £200 for each subsequent late submission. Below the threshold, points are removed automatically 24 months after the missed deadline. Once you reach 4 points you must file on time for 12 months and have submitted everything due in the previous 24 months before they clear.
Are MTD quarterly updates cumulative or per-quarter?
Cumulative. Each quarterly update restates your income and expenses from the start of the tax year, and it overwrites the previous submission. So a mistake in the first update is corrected simply by filing the correct year-to-date totals in the second. There is no separate amendment form. If the error is in your fourth update, GOV.UK says to resend the fourth update, before you make any tax adjustments and before you submit your tax return.
Who has to file MTD quarterly updates from April 2026?
Landlords and sole traders with qualifying income above £50,000. Qualifying income is gross income before expenses, and it is tested against the previous year’s tax return, so mandation from 6 April 2026 is based on the 2024-25 return. The threshold drops to £30,000 in April 2027 and £20,000 in April 2028.
Sources
Every figure above traces back to HMRC or GOV.UK. We cite the primary source rather than the many sites paraphrasing it.
- GOV.UK: Penalties for Making Tax Digital for Income Tax (updated 30 March 2026)
- GOV.UK: Find out if and when you need to use Making Tax Digital (thresholds and mandation)
- HMRC: Quarterly updates (deadline calendar)
- ICAEW TAXguide 01/25: MTD income tax (cumulative submission mechanics)
Written by Ben Morton, founder of LetSort. I build our HMRC Making Tax Digital integration directly against the API: OAuth, fraud prevention headers, cumulative year-to-date quarterly submissions, and HMRC production approval. When this article describes what happens when you file, it is describing something I have actually done rather than something I have read about. LetSort is operated by ToggleKit Ltd.