20/03/2026
HMRC has now published its penalty guidance for Making Tax Digital for Income Tax (MTD IT) — and with mandation beginning in April 2026, it’s important for business owners and landlords to understand how the new system will work.
At Volarti, we’re already preparing our clients for the shift, so here’s a clear breakdown of what’s changing.
📌 A New Points‑Based System for Late Submissions
- Miss a quarterly submission → 1 penalty point
- Reach 4 points → £200 fixed penalty
- Further missed deadlines → additional £200 penalties
- Points can be reset after a period of good compliance
💷 Separate Penalties for Late Payment
- Penalties apply at 15 days, 30 days, and 6 months after tax becomes overdue
- Late payment interest continues to apply
🕊️ Soft‑Landing Period (April 2026–April 2027)
HMRC will not issue penalty points for missed quarterly updates during the first year.
Late payment penalties and interest will still apply.
🌱 How Volarti Can Support You
With quarterly reporting becoming the norm, now is the time to ensure your systems, software, and processes are ready. We’re helping clients put practical, stress‑free processes in place so they can transition smoothly and stay fully compliant.
If you’d like help preparing for April 2026, we’re here to guide you every step of the way.