What are the penalties for Making Tax Digital for landlords?

Under Making Tax Digital, each missed deadline earns 1 penalty point and 4 points bring a £200 penalty. For 2027-28, tax paid late is charged 4% at day 15 and another 4% at day 30.

Making Tax Digital for Income Tax (MTD) uses a points system for late filing and a separate percentage system for late payment. Both are set out on GOV.UK's MTD penalties page, last checked on 16 October 2026. From April 2027 they apply to everyone who files a personal Self Assessment return, not only people in MTD, though GOV.UK says the points threshold drops to 2 for anyone who becomes exempt from MTD.

Late submission: how points work

A year has four quarterly deadlines and one tax return deadline, so it is possible to reach 4 points within a single year. Points are per deadline, not per property, so three flats and one late update still means one point.

Late payment: the percentages

Quarterly updates are reports, not payments, so late payment penalties apply to the balance of your tax bill due on 31 January and to amounts due after an amendment or assessment. GOV.UK says they do not apply to payments on account. The rates rise in 2027-28.

A worked example, for someone past their first year of the new penalties: you owe £3,000 for 2027-28 and pay none of it until day 35. The day-15 penalty is 4% of £3,000, which is £120. The day-30 penalty is another £120, so £240 in penalties, plus the daily charge from day 31. Late payment interest is also charged separately from the first day late, currently 7.75% a year (the rate since 9 January 2026).

In your first year of the new penalties you get 30 days from the due date to pay in full or agree a payment plan before any penalty starts. After that first year, the window is 15 days.

Which landlords this affects first

Landlords who joined MTD in April 2026 had no points for missed quarterly updates in 2026-27, though late tax returns and late payment were still penalised. Their 2027-28 updates can earn points. At the Budget on 28 October 2026 the government said landlords who must join on 6 April 2027 will get no points for late 2027-28 quarterly updates either, though the updates must still be sent before the tax return. For them, the earliest a late update can earn a point is 7 August 2028.

What this means for you

One late update will not cost money on its own, but points build up and stay for 24 months. A landlord who files four things late across one year pays £200, and £200 again for each miss after that until the record is clean. Paying late costs money much faster: 8% of the unpaid tax within a month for 2027-28.

The cheapest protection is a monthly routine, so the quarterly summary is nearly done before the deadline arrives. If you cannot pay in full, contact HMRC early: if a payment plan is agreed and you keep to it, GOV.UK says penalties are paused from the date you contacted HMRC.

Steps to avoid penalties

1. Check your MTD start date with the free MTD check.
2. Put the quarterly dates in your diary: 7 August, 7 November, 7 February and 7 May.
3. Send an update even for a quarter with no rent; nil updates are still required.
4. Set money aside for 31 January and 31 July, because the updates do not collect tax.
5. If you will be late paying, ask HMRC for a payment plan before day 15.
6. Keep any HMRC letter about points. If you disagree, appeal using the route it gives.

If you want the routine handled

The landlord section sets out our plans for small landlords, where we prepare each update from your records and you confirm every figure before it is sent. Our tax plans start once our HMRC registrations are complete; until then you can join the waitlist, and no payment is taken.