Under the current rules, you receive an immediate £100 fine if you submit your self-assessment tax return late – but with the new system, you will be charged £200 once you have received a certain number of points
HMRC is set to replace automatic fines with a new points system as part of a major shake-up of the self-assessment tax system.
Under the current rules, you receive an immediate £100 fine if you submit your self-assessment tax return late. But with the new system, you will be charged £200 once you have received a certain number of points.
This will be based on how often you are required to submit a self-assessment. Those on the current self-assessment system will get a point if they submit their tax return late.
If they miss the deadline again within a two-year period, they will get another point and a £200 fine from HMRC.
Making Tax Digital is a new digital system that is being rolled out to more people from April 2026. At this time, sole traders and landlords with an annual income over £50,000 will be required to use the new tax reporting system.
Under the Making Tax Digital system, you will have to report your earnings four times a year. If you miss the deadline four times in two years, you will get four points and a £200 fine.
The Telegraph reports that the points system was introduced this month for 100 taxpayers who are part of a Making Tax Digital trial. The newspaper reports that it will be rolled out for others who file a self-assessment.
An HMRC spokesman said: “We’re committed to helping customers get their tax right to avoid fines altogether. Our fairer penalty points system for late returns will mean that only Making Tax Digital customers who persistently miss deadlines will incur a financial penalty.”
Making Tax Digital is slowly being introduced for lower income thresholds. The threshold will be lowered to £30,000 from April 2027, from to £20,000 from April 2028.
At the moment, those whose self-employed income is under £20,000 will not have to use Making Tax Digital. To comply with Making Tax Digital, you will need use compatible accounting software.
These is a list of third-party Making Tax Digital-compliant products on the GOV.UK. The new deadlines for Making Tax Digital are:
- August 7 for quarter 1 (April 6 to July 5)
- November 7 for quarter 2 (July 6 to October 5)
- February 7 for quarter 3 (October 6 to January 5)
- May 7 for quarter 4 (January 6 to April 5)
