10 min read
So you missed the 7 August 2026 deadline; you certainly won ‘t be the only one. You’re self-employed and already have enough on your hands with juggling invoices, staff, suppliers chasing you for payment, and somewhere in all that, a Making Tax Digital submission slipped through the net. The first thing to say is don’t panic, and definitely don’t go quiet on it, because the businesses that get into real trouble with HMRC aren’t usually the ones who slip up once. They’re the ones who slip up and then go silent for three months hoping it’ll sort itself out, and it won’t.
This blog covers what’s likely to happen now that you’ve missed it, what to actually do about it today, and how to stop yourself ending up here again next quarter.
Quick reminder on what MTD for Income Tax even is
Making Tax Digital is HMRC’s long-running project to get businesses off paper records, and let’s be honest, off the back-of-an-envelope spreadsheet method too, and onto proper digital accounting software that reports straight to them. VAT-registered businesses are mostly already in it, and Income Tax is being phased in over the next few years for those who meet the thresholds, so if you’re self-employed and haven’t had to think about this yet, you probably will soon.
What actually happens after you miss a deadline?
A few things tend to follow, depending on how often you file and what your track record looks like.
First year soft landing (2026/27 only)
HMRC won’t issue penalty points for late quarterly updates in this first year of operation. This covers only the four quarterly updates, not your end of year tax return, which is still due 31 January 2028 and can still earn a point if late. You must still submit all outstanding quarterly updates before filing that return.
Points based system from year two
Each missed quarterly update or annual return earns one penalty point,and it’s only one per deadline even if you’re late across multiple businesses or income sources. Hit the threshold, 4 points if you file quarterly, 2 if you’re a voluntary MTD user filing annually, and you get a £200 fixed penalty. Every further late submission adds another £200. This is a submission penalty, so it applies whether or not tax is owed.
Points expiry and resetting
Points expire after 24 months if you stay under the threshold. Once you’ve crossed it, clearing your slate needs all returns from the previous 24 months filed (even late), plus 12 months of on time submissions (24 for annual filers).
Late payment penalties
Penalty points don’t apply to late payments. If tax isn’t paid by 31 January, late payment interest starts accruing from the day after the due date. During the first year of Making Tax Digital for Income Tax, no late payment penalty applies if the tax is paid within 30 days of the due date. If it’s still outstanding after 30 days, a penalty of up to 3% may apply, with further charges if the debt remains unpaid, alongside late payment interest.
Staying on top of deadlines matters
Even if you haven’t reached the penalty threshold, submitting returns on time helps you avoid unnecessary penalties and keeps your tax affairs running smoothly. Once you reach the points threshold, you’ll need to meet HMRC’s conditions before your points can be reset.
You can find the full details on GOV.UK’spenalties page for MTD Income Tax.
Right, what do I actually do now
1. Get the return in as soon as you can, ideally today
It might feel like there’s no point rushing once you’ve already missed the deadline, but every day it sits unfiled is another day working against you, so don’t wait around trying to make it perfect first.
2. If you can't pay your tax bill in full by 31 January, pay what you can
Late payment interest is charged on the outstanding balance, so making a partial payment reduces the amount interest is calculated on. Even if you can’t clear the full balance straight away, paying something is usually better than delaying payment altogether.
3. Think honestly about whether you've got a reasonable excuse
HMRC does sometimes cancel penalties, though usually only for things like a serious illness, an unexpected hospital stay, a bereavement, or accounting software genuinely failing through no fault of your own. Saying you forgot or that things were busy won’t get you anywhere, so if you do have a legitimate reason, ring HMRC and explain it properly rather than waiting to see if they notice on their own.
4. Once the dust settles, look at why it actually happened
Were the books already behind before the deadline arrived? Did the software glitch at the worst possible moment? Did everyone just assume someone else was handling it? This bit matters more than people give it credit for, because the same cause tends to repeat itself unless you actually name it and deal with it.
Can you appeal it?
Yes, you can. If you think the penalty’s unfair, or there was a genuine reason behind the delay, you’re entitled to put in an appeal. A good appeal should cover:
- What was missed
- Why it happened
- Any evidence you’ve got to back it up
- Confirmation of when the issue got sorted
It’s worth doing this quickly rather than sitting on it, since appeals submitted soon after the event tend to fare better than the ones that turn up months later with a vague explanation attached.
Why this keeps happening to people
It’s almost never deliberate. Usually it comes down to some combination of ordinary, everyday reasons:
- The bookkeeping fell a few weeks behind and nobody noticed until the deadline was already close
- The software being used technically wasn’t MTD-compliant and nobody flagged it
- Someone genuinely didn’t realise the rules applied to them yet
- There was a staff change and the deadline simply fell into a gap nobody was watching
All very ordinary reasons, and all fixable with a bit of attention.
How to stop it becoming a habit
1. Update your records as you go …
rather than saving everything up for one big session right before the deadline. It sounds obvious written down, but it really is the single biggest difference between businesses that file calmly and businesses that file in a panic.
2. Make sure your software actually does what HMRC needs …
rather than just something that looks the part on the surface. Decent software will nudge you ahead of deadlines on its own and takes a surprising amount of pressure off in the process.
3. Set more reminders than feels strictly necessary …
one reminder a week before the deadline isn’t really enough if you’re the type to get pulled into something else that day and lose track of time.
4. Get professional help …
like having an accountant involved if you haven’t already, and not just to file the return on your behalf. A good one keeps your records straight all year round, flags deadlines well before they sneak up on you, and tends to spot savings you wouldn’t have found on your own.
How we can help
This is what we do at Golding, supporting businesses with bookkeeping, payroll, tax compliance and Making Tax Digital, so financial management stops being a recurring worry. If you’ve missed a deadline or want your systems properly set up, get in touch and we’ll help you get back on track.
Anthony Burrell is the Tax Director at Golding Accountancy, specialising in UK personal tax, compliance, and strategic tax planning. He works with business owners, landlords, and property investors across the UK, helping them navigate complex tax legislation while ensuring they remain compliant and tax-efficient. Outside the office, Anthony is a dedicated West Ham supporter and has been a season ticket holder for more than 40 years. He also recommends Dext to clients looking to simplify their bookkeeping and financial processes.
