Will I Get Fined? MTD ITSA Penalty + Interest Calculator

Live estimate of HMRC's late-submission points fine, late-payment penalty, and 7.75% interest under the post-April 2025 regime. Covers the 2026/27 soft-landing and the full 2027/28 onwards rules. Update any field and the numbers move.

In 2026/27 the first four quarterly updates are in soft-landing — they don't count. Only a missed Final Declaration counts. From 2027/28 every missed quarterly update or Final Declaration counts toward the 4-point threshold.
Total estimated owed
Enter your tax bill and days late
Live estimate — figures update as you type.
Submission points fine No points yet £0
Late-payment penalty No penalty yet £0
HMRC late-payment interest 7.75% p.a. on unpaid tax £0
What happens next. Fill the form to see your next escalation date.
Tip: HMRC will often agree a Time to Pay arrangement if you contact them within 30 days of the due date. Setting one up freezes further late-payment penalties on the agreed balance.
Indicative estimate using HMRC's published rates as at 14 May 2026 (Bank of England base 3.75%, HMRC late-payment interest 7.75% = base + 4). Daily-annualised penalty capped at 2 years. Not a substitute for HMRC guidance or advice from your accountant. Rates update — we revise this tool when the BoE moves or HMRC changes the regime.

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How MTD ITSA penalties actually work

From 6 April 2026, sole traders and landlords whose qualifying income exceeded £50,000 in 2024/25 must file under Making Tax Digital for Income Tax. From 6 April 2027 the threshold drops to £30,000. The penalty regime has three separate parts — submission, late payment, and interest — and they layer on top of each other.

1. The submission points system

Every missed quarterly update or Final Declaration earns one penalty point. When you hit four points, HMRC charges a fixed £200 fine. Every further missed deadline triggers another £200 — there's no escalation past £200 per miss, but it doesn't stop either.

Points expire 24 months after the missed deadline as long as you stay below the four-point threshold. Once you've hit four, points don't drop off automatically. You clear them by filing on time for 12 consecutive months and submitting any outstanding returns from the previous 24 months.

2. The 2026/27 "soft-landing" — and what it doesn't cover

For 2026/27 only, HMRC waives points for late quarterly updates. The soft-landing covers the first four quarterly updates for anyone joining MTD in April 2026.

The soft-landing does not cover:

  • Final Declarations. Miss the 31 January 2028 deadline and you get a point straight away.
  • Late payment of tax. The balancing payment due 31 January is subject to penalties in full from day one — see below.
  • Deliberate or careless errors. Separate inaccuracy penalties apply regardless of the regime year.

3. Late-payment penalties (the harsher part)

HMRC restructured the late-payment regime on 1 April 2025 and again from April 2027. The current rates are:

Timing2026/27 (year-1 grace)2027/28 onwards
Day 1–15£0 (interest only, see below)£0 (interest only)
Day 16–30£0 (year-1 grace — first penalty waived)4% of tax owed at day 15
Day 31 one-off charge6% cumulative (3% of tax owed at day 15 + 3% of tax owed at day 30)8% cumulative (4% + 4%)
Day 31 onwards10% per year, charged daily on the outstanding balance, up to 2 years10% per year, charged daily, up to 2 years

The year-1 grace only delays when the late-payment penalty starts. Once you cross day 31, the cumulative 6% kicks in as a single hit, exactly the same way the 8% does from 2027/28.

4. The 7.75% interest — and why it stacks

HMRC charges late-payment interest separately from penalties. The formula is the Bank of England base rate plus four percentage points (previously plus 2.5 until 6 April 2025). The Bank of England base rate is 3.75% as at May 2026, so the HMRC late-payment interest rate is 7.75%, accruing daily on the unpaid tax from the original due date.

Past day 31, the 10% daily-annualised penalty runs on top of the 7.75% interest. That's an effective 17.75% annualised weight on what you still owe, plus the one-off penalty charges already added at day 31.

5. Time to Pay — the way out

HMRC will often agree a Time to Pay arrangement if you contact them inside the first 30 days. Setting one up freezes further late-payment penalties on the agreed balance, although interest typically continues to accrue. Worth a phone call before the bill grows.

Not sure if you're even in MTD yet? Start with the MTD ITSA Join Date + Deadline Checker — it tells you which phase you're caught by and when your first quarterly deadline falls. Penalties only matter once you're in the regime.

Sources: HMRC — Penalties for Making Tax Digital for Income Tax; HMRC interest rates for late and early payments; Bank of England Bank Rate. See also our deep dive on the 2026/27 soft-landing rules and the MTD Payment Forecaster for the deadlines.