Late updates and returns: points
- One point for each deadline missed.
- Four points = a £200 penalty. Then £200 for every further miss.
- A point expires after 24 months if you stay under four.
This year is different. HMRC: "There are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year." The tax-return deadline still earns points.
Late payment: a percentage
| Days late | Penalty |
|---|---|
| 1 to 15 | none |
| 16 to 30 | 3% of the tax unpaid at day 15 |
| 31 onwards | 3% at day 15, plus 3% of what is still unpaid at day 30, plus 10% a year on the balance from day 31 |
Interest runs as well, at the Bank of England base rate plus 4%.
Example
£4,000 owed on 31 January. Paid on 20 March, 48 days late, not your first year. Day-15 penalty: £120. Day-30 penalty: £120. Plus about £20 at 10% a year for 18 days, plus interest. Roughly £260 for seven weeks.
The cheaper option
Agreeing a Time to Pay plan with HMRC stops the penalties from the day you make contact. The phone call is cheaper than the penalty.
Think of it like
Points on a driving licence for lateness, and a parking meter for money.
Sources
- gov.uk: Penalties for Making Tax Digital for Income Tax
- gov.uk: Increase to late payment penalties percentage rate (from 1 April 2025)
- gov.uk: HMRC interest rates for late and early payments
We make no claims about your situation. This is not tax advice. Confirm on gov.uk and with your own accountant.
The Making Tax Digital Money Kit has the full penalty pages, the calendar and the spreadsheet, for £29.