If you have received the Winter Fuel Payment (known as the Pension Age Winter Heating Payment in Scotland), HMRC will want you to pay it back again if your total income in the tax year of the payment exceeds £35,000.
If your total income for the tax year is:
- £35,000 or less – you can keep the payment
- More than £35,000 – HMRC will take back the payment you received
If there are 2 individuals in the same household and both receive the payment, then they are assessed separately, so if one has a total income exceeding £35,000 and the other has £35,000 or less, then only the person exceeding the £35,000 limit needs to pay it back to HMRC.
Total income for these purposes includes:
- Employment or self-employment income
- Private or workplace pensions
- State Retirement Pension
- Bank of building society interest
- Dividends
- Rental income
- Taxable state benefits
- Or any other taxable income
It is paid back to HMRC either through your Self Assessment tax return computations or via your PAYE coding notice and deducted from earnings or pension income receipts.
You don’t need to do anything if it is payable via your PAYE code, as HMRC will, apparently, do the adjustments to your PAYE code to collect the money. The payment you received in winter 2025 will be collected throughout the tax year ended 5th April 2027.
By way of example, if you received the Winter Fuel Payment of £200, you’ll need to pay it back to HMRC at a rate of around £17 per month.
If you submit annual tax returns to HMRC, you need to include the amount in your tax return and tax calculations.
If you received a payment in winter 2025, you need to include it in your tax return for the tax year ended 5th April 2026 and it will be payable back to HMRC on 31st January 2027.
You can elect to opt out of future payments if you wish, either by contacting the Helpline or via the Gov.UK Winter Fuel Payment website.
If you would like any more information about this or any tax issue please contact one of our tax team on 0141-332-6331.
You can also browse our other blogs on our website: https://russell-russell.co.uk/blogs/
Take care until the next time
Russell + Russell
