Key takeaways
- If you missed an MTD quarterly update in 2026 to 2027, HMRC will not apply penalty points for the lateness.
- You must still send every quarterly update before you can submit your tax return.
- Send the missed update now. Each update covers the tax year so far, so the next one picks up the same totals.
- Penalty points for late quarterly updates start with the 2027 to 2028 tax year. Four points trigger a £200 penalty.
- Late tax returns and late payments still carry penalties this year.
If you missed an MTD quarterly update, nothing penalising happens in the 2026 to 2027 tax year. HMRC states that it will not apply penalty points for late quarterly updates this year. You should still send the missed update as soon as you can, because you cannot submit your tax return until every quarterly update is in.
What HMRC says about late updates in 2026 to 2027
HMRC’s guidance is explicit. There are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year. The same guidance says you still need to keep digital records and send quarterly updates before you can submit your tax return.
The August press release made the same point to customers who had not sent their first update. They could send it late, in a few steps, with no penalty for late updates this year. The deadlines for 2026 to 2027 are 7 August, 7 November, 7 February and 7 May.
What to do now
- Find the missed update in your software. Check which update periods show as outstanding.
- Finish your digital records for that period. Reconcile transactions and fix categories first.
- Send the missed update. Review the totals your software has created, then send.
- Send the next update on time. The 7 November update is covered in our guide to the 7 November 2026 update.
- Keep a note of what you did. It helps if HMRC asks later.
Each quarterly update shows income and expenses for the tax year so far. Once the missed update is in, later updates simply carry the running totals forward. If you spot an error in an earlier period, correct your records and the next update includes the correction.
If you have not signed up at all
You cannot send updates without signing up. HMRC began signing up customers who should be using MTD for Income Tax from September 2026, in stages. It uses 2024 to 2025 records to decide who is in scope, so a letter or message may arrive even if you have not acted.
You can avoid waiting by signing up yourself. Your agent can do it for you. The MTD software requirements guide lists what your software needs to do.
When penalty points start
The soft landing applies to the 2026 to 2027 tax year only.
| Tax year | Late quarterly update | Late tax return |
|---|---|---|
| 2026 to 2027 | No penalty points | Penalty point |
| 2027 to 2028 onwards | One penalty point per missed deadline | One penalty point per missed deadline |
At four points you receive a £200 penalty, and £200 more each time you miss another submission deadline. You can only get one point per deadline, even if you run more than one business. Points below the threshold expire after 24 months. Once you reach four points you must file on time for 12 months and clear any outstanding returns before the points are removed.
Budget 2026 adds an easement for people who join in April 2027. Our Budget 2026 MTD post explains why the April 2026 group does not get it.
Late payments and tax returns still count
Missing a quarterly update is different from missing a payment. The new late payment penalties apply from the tax year you join MTD. In the first year there is a 30-day window to pay or agree a payment plan before penalties start. After that the window is 15 days.
If you cannot pay, contact HMRC before the due date. A payment plan stops penalties from the date you contact HMRC, provided you keep to it. Our guide to Time to Pay arrangements covers the process.
Frequently asked questions
What happens if I miss an MTD quarterly update?
In 2026 to 2027 you get no penalty points. You still have to send the update, because HMRC will not let you submit your tax return until all quarterly updates are in.
Do I need to send the missed update before the next one?
Send it as soon as you can. Each update covers the tax year so far, so the next update will include the same totals, but HMRC still expects every quarterly update to be sent.
Will I get a penalty for a late tax return under MTD?
Yes. Penalty points for late tax returns apply in 2026 to 2027, and four points trigger a £200 penalty.
Can I stay out of MTD for Income Tax if I keep missing updates?
No. Missing updates does not remove the requirement. Only an exemption or a change in your circumstances can do that, so check HMRC’s guidance on what to do if your circumstances change.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance on 1 November 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.