Missed an MTD quarterly update? What happens and what to do

Missing a quarterly update feels worse than it is. Under Making Tax Digital the penalty for a late update is a point, and points only turn into money at a threshold. Here is what actually happens and how to put it right.

The points system in one paragraph

Each late quarterly update earns one penalty point. When you reach four points HMRC charges a £200 penalty, and each further late update while you are at the threshold is another £200. Points expire after a period of on-time submissions; for quarterly filers that is 24 months, and reaching the threshold also requires you to file everything outstanding and stay compliant for 12 months before the count resets. The details are in our penalties guide.

The first year

HMRC has said that late quarterly updates in the first year of mandation are treated more gently while people adjust, and the penalty-free position for 2026/27 is set out in the same guide. That does not make the deadlines optional; it means a slip now is recoverable.

How to catch up

1. Do not skip it. Send the missed update as soon as you can. Late is a point; never sent is a bigger problem at the final declaration.
2. Remember it is cumulative. Every update reports the year to date, so the next update already contains the missed quarter's figures. If the next deadline is close, one submission covers both; HMRC receives the latest totals either way. Our post on cumulative updates explains why.
3. Fix the cause. Most missed updates come from a bank statement that never got imported. Set the reminder below, or connect a bank feed so the records fill themselves.

Late payment is the expensive part

Points are for late submissions. Paying tax late is charged differently: a percentage of the tax outstanding at 15 and 30 days, then a daily rate. Quarterly updates do not create a payment; the year's tax is still due by 31 January. So a missed update costs you a point, but a missed January payment costs you real money. Keep the two separate in your head and prioritise the payment.