Penalties for Making Tax Digital for Income Tax volunteers
Changes to penalties for Making Tax Digital for Income Tax volunteers.
Changes to penalties
Changes to late submission penalties and late payment penalties will apply to you if you volunteer to test the Making Tax Digital for Income Tax service.聽聽
You can find out if and when you need to use Making Tax Digital for Income Tax聽and then decide if you want to volunteer to use the service before you need to use it.聽
When you must start using it depends on your qualifying income within a tax year. Your qualifying income is your total annual income (before you deduct expenses) from self-employment or property.聽
Read more about signing up for Making Tax Digital for Income Tax.聽
These new penalties will replace the existing penalties once you have signed up to test and use the service.聽
You cannot go back to the previous penalties once you have agreed to new penalties, even if you stop volunteering.
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.
You will not be able to change your mind once you바카라 사이트檝e agreed that the new penalties apply to you.聽
If you바카라 사이트檙e an authorised agent, you can agree to the new penalties on behalf of your clients. You should discuss this with your client before you sign them up and agree to the penalties.
When the new penalties will apply to you
The new penalties will apply to your personal Self Assessment tax return. They will not apply to Self Assessment in any other capacity, such as being a trustee or to partnerships.
We바카라 사이트檒l only confirm the new penalties apply to you, once we바카라 사이트檝e checked that:聽
- you바카라 사이트檙e eligible to sign up to the service, and have completed the process to sign up聽
- we have moved your records over to our new IT platform
Once all the steps are completed, we바카라 사이트檒l send you a letter to confirm that the new penalties apply to you.聽
The current penalties will still apply to your previous tax years.聽聽
There may be some customers who have to stop testing the service, due to specific changes in their circumstances. We바카라 사이트檒l write to you to confirm if this applies to you. Our letter will explain how this affects penalties.
Deadlines for payments and submissions
This table shows the deadlines for payments and submissions during the testing phase. The new penalties will apply if you miss these.
| Quarterly updates | Online annual return due | Balancing payment due | ||
|---|---|---|---|---|
| Making Tax Digital for Income Tax volunteer in tax year 2024 to 2025 | No penalties apply | 31 January 2026 | 31 January 2026 | 聽 |
| Making Tax Digital for Income Tax volunteer in tax year 2025 to 2026 | No penalties apply | 31 January 2027 | 31 January 2027 | 聽 |
Late submission penalties
The new late submission penalties use a points-based system. Each time you miss a deadline, you바카라 사이트檒l get a penalty point.聽聽
This means you will not face financial penalties if you make a one-off mistake by submitting an update or return late. Financial penalties will only apply if you repeatedly miss deadlines.
When you reach a penalty points threshold, you바카라 사이트檒l get a financial penalty.
If you바카라 사이트檙e also registered for VAT, your penalty points for Income Tax Self Assessment are separate to your penalty points for VAT.
How late submission penalties work for volunteers聽
When you are volunteering, for each annual tax return you submit late you바카라 사이트檒l get a penalty point, until you reach the penalty point threshold of 2 points.聽
When you reach the threshold, you바카라 사이트檒l get a 拢200 penalty. You바카라 사이트檒l also get another 拢200 penalty if you miss the deadline for submitting any more annual tax returns, while you바카라 사이트檙e at the penalty point threshold.
Removing penalty points聽
If you have not reached the penalty point threshold, after 24 months we바카라 사이트檒l remove your individual penalty point automatically.聽聽
If you have reached the threshold for penalty points, you바카라 사이트檒l need to take action to reset them to zero.바카라 사이트痀ou can do this by completing a period of compliance.聽
If you volunteer for Making Tax Digital for Income Tax, you바카라 사이트檒l need to complete a 24-month period of compliance. This means you must submit your next 2 annual tax returns on time. Your quarterly updates will not be considered for the period of compliance.
Penalties for quarterly updates聽for volunteers
There are no late submission penalties for missing quarterly update deadlines while you are volunteering to use Making Tax Digital for Income Tax.
If you stop volunteering聽聽
In the future, if you are required to use Making Tax Digital for Income Tax:聽
- late submission penalties will apply if you miss deadlines for submitting quarterly updates聽
- your penalty point threshold will increase from 2 points to 4 points聽
For example, you may volunteer for the 2025 to 2026 tax year but are then required to use Making Tax Digital for Income Tax starting from 6 April 2026. From 6 April 2026, you will get a penalty point when you submit a quarterly update late and your penalty point threshold will increase to 4 points.
Late payment penalties
If your payment is more than 15 days late, we바카라 사이트檒l start to apply late payment penalties to you.
The new late payment penalties are more proportionate to how long it takes you to pay what you owe. This means the longer you take to pay, the higher your penalty will be. These penalties do not use a points-based system.
Late payment penalties can apply to any Income Tax Self Assessment payments not paid in full, by the relevant due date. This could include:
- balancing payments
- amounts due following an amendment or assessment
Late payment penalties do not apply to any payments on account that you may need to make.
The sooner you pay your late payment, the lower the penalty amount will be.
From the first day your payment is late, until you pay in full, we바카라 사이트檒l charge late payment interest.
The following tables show how late payment penalties will apply, depending on the tax year the payment is for.
Payment penalties for the 2024 to 2025 tax year
| First late payment penalty | Second late payment penalty | |
|---|---|---|
| Payment up to 15 days late | None | None |
| Payment between 16 and 30 days late | 2% on the tax you owe at day 15 | None |
| Payment 31 days or more late | 2% of what was outstanding at day 15, plus 2% of what is still outstanding at day 30 | An annual rate of 4% per year on the outstanding balance Charged daily from day 31, until the outstanding balance is paid in full |
Payment penalties for the 2025 to 2026 tax year onwards
| First late payment penalty | Second late payment penalty | |
|---|---|---|
| Payment up to 15 days late | None | None |
| Payment between 16 and 30 days late | 3% on the tax you owe at day 15 | None |
| Payment 31 days or more late | 3% of what was outstanding at day 15, plus 3% of what is still outstanding at day 30 | An annual rate of 10% per year on the outstanding balance Charged daily from day 31, until the outstanding balance is paid in full |
If you cannot pay on time
Contact HMRC as soon as possible if you바카라 사이트檙e having difficulty paying your Income Tax by the deadline.
To avoid higher penalties, you should either:
- pay what you owe in full, on or before the due date
- contact us to apply for a Time to Pay arrangement
Setting up a Time to Pay arrangement may stop your late payment penalties from increasing.
Making an appeal
We will send you a penalty decision letter if you get a:
- late payment penalty
- late submission penalty point
- 拢200 late submission penalty
The process to appeal against a decision is the same for Making Tax Digital for Income Tax and for Self Assessment. If you do not agree with our decision, check when and how to appeal against it.
Updates to this page
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Information has been updated to confirm that you must agree to the new penalties when you sign up and you will be asked in the service if you agree. Information about late submission penalties has been updated to clarify that it is a points-based system and that when you reach a penalty points threshold, you바카라 사이트檒l get a financial penalty. Section 'How late submission penalties work' has been updated to confirm the information is for volunteers. A new section about what happens when you stop volunteering has been added. Information about payment penalties for the 2025 to 2026 tax year onwards has been added. Section 'If you cannot pay on time' has been updated to confirm that the appeals process for Making Tax Digital for Income Tax is the same as Self Assessment.
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First published.