Self-Assessment deadline reflection - and an important change

With the Self-Assessment filing deadline now behind us, it’s worth pausing to reflect:

1. 12,029,168 Self-Assessment returns were expected
2. 11,489,825 Self-Assessment returns were filed on time
3. An estimated 1 million taxpayers missed the deadline

For those who filed late and for everyone planning ahead there’s an important change coming in how HMRC applies penalties.

From April 2026, HMRC will apply a new penalty points system for late submissions. The aim is to target persistent late filers, rather than penalising genuine one-off mistakes.

How the penalty points system works

🔹 Missing a Self-Assessment filing deadline (such as an annual return or MTD quarterly update) will result in one penalty point, rather than the automatic £100 fine under the old system.

🔹 Points build up over time and once a threshold is reached, financial penalties apply.

Points thresholds and when fines apply

Once a taxpayer reaches a set number of points, a £200 penalty is charged.   The threshold depends on how often you’re required to file:

For those under traditional Self-Assessment, filing is annual meaning two missed annual deadlines within a rolling period would trigger a penalty.

Under MTD for Income Tax, many sole traders and landlords will be required to submit quarterly updates, meaning the four-point threshold will apply increasing the risk of penalties if deadlines are missed.

What counts as a missed deadline?

You’ll receive one penalty point each time you miss a required submission, including:

• Annual Self-Assessment tax returns
• Quarterly MTD updates (where applicable)
• Other specified return deadlines

Even being one day or one hour late counts as a missed deadline.

What happens after you hit the threshold?

Once the relevant threshold is reached: 

• A £200 penalty is charged
• Each further missed deadline usually results in another £200 penalty
• Your points total stops increasing, but penalties continue until compliance improves

Resetting or removing points

• If you haven’t reached the threshold whereby a penalty will apply, points expire after 24 months from the missed deadline.
• If you have reached the threshold whereby a penalty will apply, you will need a sustained period of compliance to reset your points:
  • 24 months for annual filing
  • 12 months for quarterly MTD obligations (HMRC will confirm the detailed rules)

What about late payment penalties?

The penalty points system applies to late filing only.

Late payment of tax is dealt with separately and can still result in interest and late payment penalties.

Practical example: 

• You file your Self-Assessment return late one year → 1 point
• You file late again the following year → 2 points → £200 penalty
• You then file on time going forward → your points can begin to reset over time

Why this matters now

With quarterly reporting on the horizon for many, keeping on top of financial records and deadlines has never been more important. More frequent submissions mean more opportunities to miss a deadline and more risk of penalties.

Getting organised early, maintaining accurate digital records, and understanding what MTD will mean for you can make all the difference.

If you’re unsure where you stand, or want support preparing for Making Tax Digital, please speak to your usual JS contact. We’re here to help you get ahead - not catch up.