Late VAT returns attract penalty points under the same points-based system that applies across MTD, with a financial penalty once you hit the threshold for your filing frequency, and points expiring after a period of compliant filing. Late payment is charged separately, as interest plus escalating penalties. Sitting behind that is a distinct exposure that gets less attention: failing to keep digital records or maintain digital links is its own breach, and HMRC can charge for it whether or not your returns were on time and correct. That is the risk in the quiet non-compliance we see most — the voluntarily registered business filing accurate returns by typing them into the website every quarter. Correct returns do not cure an absent digital link.