ATT Budget Representation - extension of MTD penalty soft landing

The ATT has submitted a Budget representation suggesting that the existing penalty easement for late filing of Making Tax Digital for Income Tax (MTD) quarterly updates for 2026/27 be extended to those taxpayers required to join MTD for the first time in 2027/28.

As set out in our representation, over 1 million lower income taxpayers are expected to join MTD for the first time in April 2027, many of whom are unrepresented and not currently using software.  An extension of the existing soft landing would give these taxpayers much needed time to get to grips with the complexity of the new regime (or appoint an agent to support them) without having to worry about penalties. It would also bring the soft landing for late filing penalties in line with that which applies for the new late payment penalties.