What happens if you don't use Making Tax Digital?

If you are in scope and don't comply, HMRC's penalty points system applies. Missing a quarterly update does not trigger a penalty, but missing your End of Period Statement does: £100 initially, £300 after three months, and £500 after six months, with further penalties possible after 12 months.

What are the penalties for missing MTD deadlines?

Missing a quarterly update does not on its own trigger a penalty. Missing your End of Period Statement triggers a £100 penalty on initial failure, rising to £300 if three months late and £500 if six months late, with additional penalties possible after 12 months.

What is the penalty for late MTD submission?

A late End of Period Statement incurs £100 on initial failure, £300 if three months late, and £500 if six months late, with additional penalties possible after 12 months. Late quarterly updates do not on their own trigger a penalty.

Can HMRC waive MTD penalties?

Yes. HMRC may waive penalties if you have a reasonable excuse, such as serious illness or bereavement. You should contact HMRC and explain your situation rather than ignoring the deadline. Submitting an on-time best estimate and amending it later is also safer than missing the deadline.

MTD Income Tax penalties 2026: what happens if you miss a deadline

The MTD penalty regime is straightforward: missing a quarterly update does not on its own trigger a penalty, but missing the End of Period Statement (EOPS) does — and the penalties escalate quickly. Here is exactly what you are risking.

The penalty structure

Late by	EOPS penalty	Quarterly update
Initial failure	£100	No penalty
3 months late	£300	No penalty
6 months late	£500	No penalty
12 months late	Additional penalties possible	No penalty

Note: these are the published rates at the time of writing. Verify current penalty amounts on gov.uk.

Quarterly updates vs EOPS — what’s the difference?

Under MTD Income Tax you submit two types of document:

Quarterly updates — a summary of income and expenses for each three-month period. Missing one does not trigger a penalty, but it does mean your records are incomplete and you risk missing the EOPS deadline.
End of Period Statement (EOPS) — the final statement that confirms your figures for the tax year. This is the one that triggers penalties if late. Due by 31 January after the tax year ends.

How to avoid penalties

Pick software with good notifications. Every HMRC-recognised package will remind you ahead of each deadline — choose one that does so reliably (FreeAgent, Xero, QuickBooks, and Sage all do).
Reconcile weekly, not quarterly. Leave bookkeeping to the last week of the quarter and you will discover missing receipts on 6 August. Reconcile as you go and the quarterly submission becomes a 10-minute job.
Submit a best-estimate if needed. HMRC allows amendments to quarterly updates. Submit a best-estimate on the day and correct it later — that is far better than missing the deadline.
Set calendar reminders. The four 2026/27 quarterly deadlines are 7 August 2026, 7 November 2026, 7 February 2027, and 7 May 2027. The EOPS is due 31 January 2028.

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FAQ

Can I amend a quarterly update after submitting?

Yes. HMRC allows you to amend quarterly updates at any time. If you submitted a best-estimate and later find the correct figures, log back in and amend the submission.

What if I have genuine hardship and miss the deadline?

HMRC may waive penalties if you have a reasonable excuse (serious illness, bereavement, etc.). You need to contact HMRC and explain the situation. Do not simply ignore the deadline hoping for the best.

Do I still need to file a Self Assessment return?

Yes. The quarterly updates replace the once-a-year calculation, but the final tax return (and the EOPS) is still due on 31 January after the tax year ends.