Penalties for Making Tax Digital for Income Tax volunteers

Changes to penalties

If you’re usingChanges Makingto Tax Digital for Income Tax, new penalties will replace the current late submission and late payment penalties that apply to your personal tax return.  

The new penalties willand not apply to the following Self Assessment tax returns:

• non-resident company (submitted on behalf of the company)
• trust or estate (submitted by a trustee)
• partnership (submitted by a nominated partner)

Current late payment andpenalties late submission penalties will still apply to theseyou taxif returns.

Thereyou arevolunteer no changes to how latetest payment interest works.

When the new penalties will apply to you 

Changes to late submission penalties and late payment penalties will apply if you voluntarily sign up to use Making Tax Digital for Income Tax.  Tax service.  

You can can find out if and when you need to use Making Tax Digital for Income Tax and then decide if you want to volunteer before you’re required to use it.  

Youthe can also readservice morebefore about signingyou upneed forto Makinguse Tax Digital for Income Tax.  it. 

TheWhen currentyou penaltiesmust willstart stillusing applyit todepends your previous taxon years.your Forqualifying example,income ifwithin youa volunteertax toyear. useYour Makingqualifying Taxincome Digitalis foryour Incometotal Taxannual fromincome 6(before Aprilyou 2026,deduct currentexpenses) penaltiesfrom willself-employment applyor toproperty. 

Read yourmore 2025about tosigning 2026up taxfor returnMaking deadlineTax ofDigital 31for JanuaryIncome 2027. Tax. 

We’ll sendThese younew apenalties letterwill to confirm when thereplace newthe penalties will applyexisting topenalties you,once once we’ve checked both:  

• you have signed up toup Makingto Taxtest Digitaland foruse Incomethe Taxservice. 

• we have moved your records over to our new IT platform 

How to agree to the new penalties

You need to agree that the new penalties will apply to you when you sign up to use Making Tax Digital for Income Tax. You will be asked in the service when you sign up.

If you’re an authorised agent, you can agree to the new penalties on behalf of your client.clients. You should discuss this with your client before you sign them up and agree to the penalties.

DeadlinesWhen forthe paymentsnew andpenalties submissionswill apply to you

The new penalties apply ifpenalties youwill miss theapply deadlineto for submitting youryour taxpersonal return orSelf makingAssessment your payments. 

Thetax deadlinereturn. to submit yourThey taxwill returnnot andapply payto anySelf taxAssessment youin oweany isother 31capacity, Januarysuch afteras thebeing enda oftrustee theor taxto year.partnerships.

Quarterly updates

You

• you’re stilleligible need to keepsign digitalup recordsto and sendthe quarterlyservice, updates beforeand youhave can submit yourcompleted taxthe return.  

  The quarterlyprocess update deadlinesto are: 

  • 7sign August up 
  • 7we November 
  • 7have February  
  • 7moved May your records over to our new IT platform

  Late

  Once submissionall penalties

  Thethe newsteps lateare submissioncompleted, we’ll send you a letter to confirm that the new penalties areapply pointsto based. you. 

  ForThe eachcurrent taxpenalties returnwill you submit late you’ll getstill aapply penaltyto point.your previous tax years.  

  TheThere penaltymay pointbe thresholdsome iscustomers 2who points.have Ifto stop testing the service, due to specific changes in their circumstances. We’ll write to you reachto this,confirm you’llif getthis a:applies to you. Our letter will explain how this affects penalties.

  • £200

    Deadlines penalty

  • £200for penaltypayments eachand timesubmissions

    This table shows the deadlines for payments and submissions during the testing phase. The new penalties become due if you miss anotherthese.

    If you’re also

    	Quarterly updates	Online tax return deadline due	Balancing payment due
    Making registeredTax Digital for VAT,Income yourTax penaltyvolunteer pointsin fortax year 2024 to 2025	No penalties apply	31 January 2026	31 January 2026
    Making Tax Digital for Income Tax arevolunteer separatein tax year 2025 to your2026	No penaltypenalties pointsapply	31 forJanuary VAT. 2027	31 January 2027

    Late paymentsubmission penalties

    The new latenew payment penaltieslate aresubmission morepenalties proportionateuse toa howpoints-based longsystem. itEach takestime you tomiss paya whatdeadline, youyou’ll owe.   get a penalty point.  

    LateThis payment penaltiesmeans applyyou towill payments not paidface infinancial full,penalties byif theyou relevantmake due date. This includes: 

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    • amountsreturn duelate. followingFinancial anpenalties amendmentwill oronly assessmentapply onif youryou taxrepeatedly return 
    miss deadlines.

    LateWhen paymentyou penaltiesreach doa notpenalty applypoints tothreshold, any paymentsyou’ll onget account thata youfinancial may need to make. penalty.

    If youyou’re getalso aregistered latefor paymentVAT, penalty,your the penalty amountpoints dependsfor onIncome howTax longSelf itAssessment takesare youseparate to payyour whatpenalty points for VAT.

    How late submission penalties work for volunteers 

    When you owe.are Thevolunteering, soonerfor each tax return you paysubmit your overduelate amount,you’ll theget lowera penalty point, until you reach the penalty amountpoint willthreshold be. of 2 points. 

    TheseWhen penaltiesyou arereach notthe points based andthreshold, willyou’ll apply toget eacha late£200 payment.  

    Frompenalty. theYou’ll firstalso dayget youranother payment£200 ispenalty late,if until you paymiss inthe full,deadline we’llfor charge latesubmitting paymentany interest. 

    Whenmore latetax paymentreturns, penaltieswhile apply 

    Inyou’re yourat firstthe yearpenalty ofpoint newthreshold.

    Removing penalties,penalty points 

    If you have 30not daysreached from the paymentpenalty duepoint datethreshold, to either:  

    • makeafter full24 payment 
    • contactmonths HMRCwe’ll toremove setyour upindividual apenalty paymentpoint plan 
    automatically.  

    AfterIf 30you days,have we’llreached startthe tothreshold applyfor penalties. Afterpenalty yourpoints, firstyou’ll year,need thisto reducestake action to 15reset days. 

    Youthem willto onlyzero. You receivecan thedo 30-daythis by completing a period once — ifof compliance. 

    If you later becomevolunteer required tofor use Making Tax Digital for Income Tax, youTax, willyou’ll continueneed to havecomplete 15a days.  

    The24-month followingperiod tableof showscompliance. howThis latemeans paymentyou penaltiesmust willsubmit apply,your dependingnext 2 tax returns on thetime. taxYour yearquarterly updates will not be considered for the paymentperiod isof for.compliance while you are a volunteer.

    	Penalties for 2024for toquarterly 2025updates for taxvolunteers There year	Penaltiesare for 2025 tono 2026 taxlate year
    Paymentsubmission uppenalties tofor 15missing daysquarterly late	Noupdate penalty	Nodeadlines penalty
    Paymentwhile 16you are volunteering to 30use daysMaking late	NoTax penalty	3%Digital offor the taxIncome owedTax. If at dayyou 15,stop orvolunteering   In nothe penaltyfuture, if it’syou yourneed firstto year
    Paymentuse 31Making daysTax orDigital morefor Income Tax:  late	2% ofsubmission thepenalties taxwill owedapply atif dayyou 15, and 2%miss ofdeadlines whatfor issubmitting stillquarterly owedupdates  your atpenalty daypoint 30 Plus,threshold anwill annualincrease ratefrom of2 4%points perto year4 onpoints  For theexample, outstandingyou amount,may chargedvolunteer dailyfor fromthe day2026 31to until2027 the tax isyear paid,but orare forthen upneed to 2use years	3% ofMaking theTax taxDigital owedfor at day 15, and 3%Income of whatTax isstarting stillfrom owed6 at day 30 Plus,April an2027. annualFrom rate6 ofApril 10%2027, peryour yearpenalty onpoint thethreshold outstandingwill amount,increase chargedto daily4 frompoints dayand 31you untilwill theget taxa ispenalty paid,point orwhen foryou upsubmit toa 2quarterly years

    update late.

    If you cannotneed payto onuse time

    ContactMaking HMRCTax asDigital soonfor asIncome possibleTax iffrom you’re6 havingApril difficulty2026, payingwe yourwill Incomenot Taxapply bypenalty points for late quarterly updates for the deadline.first year. Penalty points will still apply for late tax returns.

    You can avoidYou penaltieswill bystill contactingneed HMRCto assend soonyour asquarterly possibleupdates to before discussyou whetherare you can setable upto asubmit paymentyour plan andtax payreturn.

    Late bypayment instalments. 

    penalties

    IfIn ayour paymentfirst planyear isof agreednew andpenalties, youif makeyour thepayment payments,is penaltiesmore willthan be30 paused fromdays thelate, date youwe’ll contactedstart us. 

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    • submitLate yourpayment nextpenalties 2can taxapply returnsto onany time  

    • submitIncome anyTax outstandingSelf taxAssessment returnspayments fornot paid in full, by the previousrelevant 24due months  date. This could include:

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      • amounts due following an amendment or assessment

      YouLate canpayment signpenalties indo tonot yourapply HMRCto onlineany servicespayments on account that you may need to seemake.

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      Wetables show how late payment penalties will sendapply, youdepending aon letterthe iftax youyear getthe a:payment is for.

      Payment penalties for the 2024 to 2025 tax year

      • £200

      	First late payment penalty	Second late submissionpayment penalty point
      Payment up to 15 days late	None	None
      Payment submissionbetween penalty If16 youand do30 notdays agreelate	2% withon the penaltytax pointyou owe at day 15	None
      Payment 31 days or penalty, youmore canlate	2% appeal.of Yourwhat letterwas willoutstanding tellat youday how15, toplus do2% this. Ifof you’rewhat later required tois usestill Makingoutstanding Taxat Digital forday Income30	An Tax   Forannual therate taxof 4% per year 2027on tothe 2028outstanding onwards, therebalance areCharged differencesdaily to latefrom submission penalties ifday you’re31, required tountil usethe Makingoutstanding Taxbalance Digitalis forpaid Incomein Tax. full

      These

      Payment are:  

      • late submission penalties willfor applythe if2025 youto miss2026 quarterlytax updateyear deadlines
      onwards

      • your

      	First penaltylate pointpayment thresholdpenalty	Second willlate increasepayment frompenalty
      Payment 2up points to 415 points   Fordays example,late	None	None
      Payment youbetween may16 volunteerand for30 thedays 2026late	3% toon 2027the tax yearyou butowe areat thenday required15	None
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