Winter fuel payments to be clawed back via tax system
A government U-turn on the winter fuel payment was announced this week, with a new means-tested threshold. How will this work in practice?
Recent weeks have been rife with speculation that the government would announce a climbdown for the current year, and this has now happened. Under the new system, all pensioners will initially receive the winter fuel payment. For those with incomes above the new threshold of £35,000, this will then be clawed back via PAYE or self-assessment (as applicable). The government has confirmed that this threshold will apply to each individual, not to each household.
The threshold includes all sources of taxable income, so pensions (including the state pension) will be included, but qualifying ISA interest won’t be. It will be possible to opt out of receiving the payment, e.g. where you know your income will exceed the threshold. Crucially, the government has confirmed that nobody will need to register with HMRC as a result of the changes.
Related Topics
-
5 April deadline approaching for key tax relief claims
With the end of the 2025/26 tax year now less than seven weeks away, business owners and company directors should remember that several valuable reliefs and elections must be made before 5 April. Which opportunities are about to close?
-
HMRC reminds employers about payrolling benefits deadlines
HMRC is reminding employers of key dates and preparations ahead of the transition to real-time payrolling of benefits in kind (BiKs). With an important voluntary registration deadline approaching, what do payroll teams need to know?
-
Why do frozen mileage rates affect VAT?
Your business pays a fixed mileage allowance to staff who use their private cars for business travel. The rates published by HMRC have been frozen since 2011 but is this relevant to determine how much input tax you can claim on the payments?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.