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For income tax self assessment (ITSA) taxpayers, the new penalty regime described below replaces the harmonised regime at A4.550 from a date to be appointed by the Treasury via regulations¹. See the HMRC technical note: Penalties for late submission. For ITSA taxpayers with business or property business turnover of more than £50,000 per year, who will be required to submit digital quarterly updates via Making Tax Digital (MTD), the new regime takes effect from 6 April 2026. For ITSA taxpayers with turnover above £30,000, it takes effect from 6 April 2027². There will be further consultation before the regime is extended to businesses with turnover of £30,000 or under³.

For those joining the MTD ITSA pilot, the new regime will apply on joining the pilot, but only for annual submissions until MTD ITSA is mandated⁴.

HMRC has published guidance on how this impacts volunteers for the pilot, see Penalties for Income Tax Self Assessment volunteers on GOV.uk.

See A4.172, for details on MTD ITSA.

See also the separate