SA Penalty Points: Are You Ready for April 2027?

Written by James Veal

If you file a traditional, once-a-year Self Assessment return, HMRC’s penalty points system might sound like someone else’s problem. It currently applies to sole traders and landlords already filing quarterly under Making Tax Digital. That changes from April 2027: the points-based regime extends to cover all Self Assessment taxpayers, not just those in MTD. And in one respect, annual filers actually have it tougher than quarterly filers do.

What’s Changing in April 2027

The points-based penalty system already applies to VAT and to the sole traders and landlords who’ve joined Making Tax Digital for Income Tax. From 6 April 2027, the same framework — introduced under Finance Act 2021, Schedule 24 — extends to cover late filing for every remaining Self Assessment taxpayer. That includes everyone still filing the traditional annual return. The government confirmed this policy at the Autumn Budget in November 2025.

This replaces the old system most Self Assessment filers know: a flat £100 penalty for missing the 31 January deadline, escalating with further fixed penalties and tax-geared surcharges the longer a return stays outstanding. The new points-based system replaces that old regime entirely, rather than running alongside it. See our guide on avoiding Self Assessment penalties for how the current system works in the meantime.

How the Points-Based System Works

Instead of an immediate fine for a single missed deadline, you build up points:

• You get 1 point for each missed filing deadline
• Once you reach a set points threshold, HMRC issues a £200 penalty
• Further missed deadlines after that keep triggering £200 penalties, without adding more points
• Points expire automatically after 24 months, provided you stay below the threshold
• Once you’ve hit the threshold, points only reset after a 12-month period of consistent, on-time compliance

The system aims to be lenient towards a one-off slip, reserving the financial penalty for a pattern of repeated lateness. But it also means the consequences of missing deadlines build up quietly in the background, rather than landing all at once.

Why Annual Filers Reach the Threshold Faster

Here’s the detail that catches people out: the points threshold isn’t the same for everyone, and it isn’t in annual filers’ favour.

• Quarterly filers (MTD) — submit four updates a year, and need 4 points (i.e. four missed deadlines) before triggering the £200 penalty
• Annual filers (traditional Self Assessment) — submit one return a year, but need only 2 points before triggering the same £200 penalty

In practice, that means an annual filer is only two late returns away from a fine. Someone filing quarterly under MTD has more room for an isolated slip before the same penalty applies. If you’re still on annual Self Assessment, there’s less margin for error than you might assume — missing your deadline two years out of a few is enough to tip you over.

Late-Payment Penalties Are Also Changing — On a Different Date

Separately from the points system for late filing, HMRC is also reforming the penalties for late payment. This change lands on a different date: 1 April 2027.

The old regime charged a 5% surcharge at 30 days, 6 months and 12 months. The new one replaces that with a more gradual, tiered structure based on how many days the payment is overdue, combined with daily late-payment interest that continues to accrue throughout. The broad shape: a lower initial penalty shortly after the due date, rising in stages the longer the tax stays unpaid, with interest running throughout. That’s a meaningful change from the old system’s bigger jumps at the 30-day, 6-month and 12-month marks.

If you’re ever going to be late paying rather than late filing, it’s worth checking the detail of your own situation nearer the time. HMRC will confirm the final structure in its guidance ahead of the change.

What This Means for You

If you already file on time, none of this changes your day-to-day experience. The whole point of a points-based system is that it’s lenient towards people who comply. But if deadlines have caught you out before, or you’ve had a wobble in previous years, treat April 2027 as a reset point:

• Know your points position once the new system goes live — HMRC will show your points and any penalties in your online account
• Don’t assume a single missed deadline is harmless — for annual filers, it’s now halfway to a fine
• Build in a buffer before 31 January rather than relying on the day itself, particularly if you’ve filed late before
• If you already missed a deadline, see our guide on what to do if you’ve missed the Self Assessment deadline

If you’re approaching the MTD £30,000 threshold too, it’s worth reading these changes together. The same points framework already applies there, just with a more forgiving 4-point threshold rather than 2. See our guide to the MTD £30,000 threshold from April 2027.

Let PBAS Keep You on the Right Side of the Deadline

PBAS handles Self Assessment filing for sole traders and small businesses across Scotland. We’ll keep you ahead of every deadline, so points and penalties never become an issue in the first place.

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Frequently Asked Questions

Does this replace the current £100 late filing penalty?

Yes. The points-based system replaces the flat £100 penalty and escalating surcharge structure that traditional Self Assessment filers currently face, starting April 2027 — it doesn’t run alongside the old regime.

I already have penalty points from filing VAT late — does that count?

No. Points are tracked separately for each tax regime. Your VAT points, MTD Income Tax points and Self Assessment points are counted independently of one another.

What happens after I reach the points threshold and get fined?

Each further missed deadline after you’ve hit the threshold triggers another £200 penalty. Your points only reset once you complete a 12-month run of on-time filing.

Does this affect the payment deadline itself, or just filing?

The points system is specifically about late filing. HMRC penalises late payment separately, under a different, newly reformed structure that takes effect from 1 April 2027 — a few days before the filing changes.

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Need Help with This?

PBAS provides affordable bookkeeping and accountancy services for sole traders and small businesses across East Lothian, Edinburgh, Midlothian and throughout Scotland. If you’d like a hand with your accounts, self assessment or any tax matter, get in touch for a free, no-obligation chat.

• Self Assessment Penalties — How to Avoid Them
• What to Do If You’ve Missed the Self Assessment Deadline
• MTD £30,000 Threshold: Are You Ready for April 2027?

This article provides general guidance only. For specific advice on your circumstances, consult HMRC directly via the GOV.UK guide to penalties for late submission or speak to a qualified accountant.