HMRC rolling out a penalty points system – what this means for taxpayers

HMRC has confirmed the introduction of a new penalty points system for late tax submissions, forming part of its wider push towards Making Tax Digital (MTD).

What’s changing?

Instead of immediate financial penalties for missed deadlines, taxpayers will now receive penalty points for each failure to file on time. Once a threshold is reached, financial penalties will apply – similar in concept to driving licence points.

Why this matters

The intention is to create a fairer and more proportionate system, distinguishing between occasional mistakes and persistent non-compliance.

However, for businesses, landlords and the self-employed, this also means:

• Less margin for repeated delays
• Greater importance on robust systems and deadlines
• Increased HMRC visibility over compliance behaviour

With reporting obligations increasing under MTD, understanding how this system works — and how to avoid accumulating points — will be crucial.
📞 If you’d like to understand how these changes may affect you or your business, call us on 0330 390 5959 or email – sales@lmjgroup.co.uk