Delaying MTD late fines a “sensible step”
The decision not to charge late filing penalties for taxpayers coming into the Making Tax Digital regime next year has been hailed as a “sensible step” by the Association of Taxation Technicians.
It was confirmed in today’s Budget1 that the government will not apply late submission penalties for quarterly updates during the 2026-27 tax year for Income Tax Self Assessment (ITSA) taxpayers required to join MTD.
The penalty regime will instead take effect from 6 April 2027, allowing those covered under the new scheme time to adjust to the changes.
The Association says the scale of the MTD changes will require some adjustments for taxpayers, and backs the decision not to penalise those who may miss deadlines due to “struggling” with the new rules.
Jon Stride, chair of the ATT’s Technical Steering Group, said:
“The Government’s announcement that taxpayers entering Making Tax Digital for Income Tax (MTD) will not face late filing penalties in their first year is a sensible step.
“More than 850,000 landlords and sole traders are expected to come into MTD from April next year. They will be required to use software to keep their records and file quarterly summaries of their income and expenses with HMRC. For some this will be a big change, and those trying their best to comply but struggling shouldn’t be penalised.
“We would also encourage HMRC to ensure they have sufficient support available to help taxpayers transition to MTD, especially the approximately 25% of affected taxpayers who don’t have an agent to help them.”
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