HMRC bungles 2026/27 PAYE codes for pensioners
For some pensioners, the 2025/26 winter fuel payment should be collected via their 2026/27 PAYE code. HMRC has started to issue PAYE codes for the new tax year, but the extra charge is missing. What's going on?
The winter fuel payment was paid to state pensioners automatically at the end of 2025, unless they opted out in time. The full payment is clawed back if an individual's income exceeds £35,000 gross per annum, and for those that aren't completing tax returns, it's supposed to be collected through their PAYE code. This means the winter fuel payment received in 2025/26 will be collected via the 2026/27 PAYE code. The adjustment will deduct around £17 per month to claw back the payment over the course of the tax year. Some PAYE tax codes have already been issued for 2026/27, but HMRC has confirmed these may not include the charge. No action is required because an updated PAYE code will be issued in April 2026 to rectify this.
It is possible to opt out of the winter fuel payment, but this will need to be done each year. From April 2026 it should be possible to opt out using an online form.
Related Topics
-
Tribunal rejects reliance on adviser as reasonable excuse
A recent First-tier Tribunal decision has confirmed that relying on an accountant does not automatically amount to a reasonable excuse for missing a self-assessment deadline. The case highlights the limits of delegating tax responsibilities. What does this mean in practice?
-
HMRC issues new wave of offshore “nudge” letters
HMRC has issued a further round of “nudge” letters targeting individuals it believes may have undeclared offshore income or gains. The letters form part of HMRC’s ongoing use of data from international information exchange agreements. What should you do if you receive one?
-
Payroll changes for 2026/27
As the end of 2025/26 draws closer, HMRC has published a raft of updates and reminders for employers. Which changes do you need to be aware of that might impact your payroll in 2026/27?