What Happens Immediately When You Miss a Deadline
If you miss an MTD ITSA quarterly submission deadline, HMRC’s system automatically records a penalty point against your account. This is HMRC’s new points-based approach — designed to be tolerant of occasional lapses while penalising persistent non-compliance.
A single missed quarterly deadline earns one penalty point. No immediate financial penalty applies. The financial penalty (£200) only triggers when you accumulate four points — approximately one full year of consistent non-compliance.
The Escalation Path: From Missed Deadline to Financial Penalty
| Missed Submissions | Points Total | Consequence |
|---|---|---|
| 1st missed deadline | 1 point | Warning notice — no fine |
| 2nd missed deadline | 2 points | Warning notice — no fine |
| 3rd missed deadline | 3 points | Warning notice — no fine |
| 4th missed deadline | 4 points | £200 penalty triggered |
| 5th missed deadline | 5 points | Additional £200 penalty |
| Each further miss | +1 point | Additional £200 per miss |
What To Do If You Miss a Deadline
- File as soon as possible — submit the late quarterly update immediately. A late submission still counts as filed and stops further points from accumulating for that period.
- Check your HMRC account — log in to Government Gateway to see how many points you have accrued. HMRC will have sent a notification to your online account.
- Do not ignore HMRC’s correspondence — HMRC will issue a penalty points notice. Ignoring it will not make it go away and may complicate any future appeal.
- Consider whether you have a reasonable excuse — if the missed deadline was due to serious illness, bereavement, or HMRC system failure, you may be able to appeal.
- Return to full compliance immediately — points only expire after a sustained period of on-time submissions. Every further miss prolongs the recovery period.
Can You Still Submit a Late Quarterly Update?
Yes. A late submission is always better than no submission. Filing the overdue quarterly update:
- Stops the penalty point count from increasing for that period
- Ensures HMRC’s tax estimate is updated with accurate data
- Demonstrates a willingness to comply, which strengthens any appeal
- Prevents the late submission from potentially being treated as deliberate non-filing
How to Appeal an MTD Penalty
You can appeal to HMRC if you have a reasonable excuse for the late submission. Reasonable excuses HMRC accepts include:
- Serious or life-threatening illness of you or a close family member
- Bereavement of a close family member close to the deadline
- Technical failure of HMRC’s own systems (you must have evidence of trying to file)
- Unexpected postal delays (for paper correspondence)
- Natural disaster affecting your ability to file
HMRC does not accept the following as reasonable excuses: not knowing about the deadline, software not being set up in time, or being too busy. Appeals must be submitted within 30 days of the penalty notice.
How Long Until Points Expire?
Penalty points expire after 24 months if you have not reached the four-point threshold and no new points are added during that period. If you reach the threshold and trigger a financial penalty, points reset only after filing four consecutive on-time quarterly submissions.
Frequently Asked Questions
Never miss an MTD deadline again
AccTek tracks every quarterly submission date and files on your behalf. Our clients have a zero missed deadline record.