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HMRC to Recover Winter Fuel Payments by Changing Pensioners’ Tax Codes

The change will spread repayments through PAYE deductions and could raise monthly tax for higher‑income pensioners who must opt out by September to avoid recovery.

Overview

  • HMRC confirmed on Wednesday that it has begun reclaiming Winter Fuel Payments for 2025/26 and will recover payments received in 2026/27 and 2027/28 by altering recipients’ tax codes until the amounts are repaid.
  • For a typical £200 Winter Fuel Payment, HMRC says affected pensioners will face roughly £17 extra per month in 2026/27 and about £33 extra per month in 2027/28 as PAYE deductions.
  • The recovery applies only to pensioner households with total annual income above £35,000 who did not opt out of the payment.
  • Those who file Self Assessment online will find the 2025/26 Winter Fuel Payment pre‑populated and must submit returns by January 31, 2027, while paper filers must add the payment by October 31, 2026; some tax-code changes may create ‘K’ codes that reduce personal allowance.
  • HMRC will collect repayments centrally across the UK and has warned of scams, giving guidance to report suspicious texts to 60599 and emails to phishing@hmrc.gov.uk, and reminding pensioners the opt‑out form must be submitted by 11.59pm on September 20, 2026 or by phone before 6pm on September 18, 2026.