Under the old system, one missed Self Assessment meant one penalty. Under Making Tax Digital you have five submissions a year, and HMRC uses a points-based system for late ones. Here's what that means in practice.
How the points system works
Each time you miss a submission deadline, you get a penalty point. You don't pay anything for a single slip — but once your points reach a threshold, HMRC charges a fixed penalty, and then a further penalty for every late submission after that while you remain at the threshold.
- For taxpayers making quarterly submissions, the points threshold is generally four points.
- Reaching the threshold triggers a £200 penalty.
- Each further late submission while at the threshold adds another £200.
- Points eventually expire after a sustained period of submitting on time.
The trap: with four quarterly updates plus a final declaration each year, it's easy to drift to the threshold in a single year if you fall behind — then every subsequent miss costs £200.
Late payment is separate
Penalty points are for late submissions. Paying your tax late is penalised separately under HMRC's late-payment rules, which escalate the longer the tax remains unpaid, plus interest. So lateness can hit you twice.
How to avoid penalties entirely
- Keep digital records as you go, not in a last-minute rush.
- Diarise all four quarterly dates (7 Aug, 7 Nov, 7 Feb, 7 May) and the 31 January final declaration.
- Use compatible software that prompts and submits for you.
- Or have a firm handle the filings so deadlines simply aren't your job.
Penalty rules can change and individual circumstances vary. This is general guidance — confirm specifics with HMRC or a qualified accountant.
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