Winter fuel payment clawback
In a recent announcement by The Chancellor, Rachel Reeves, it was confirmed that up to 9 million state pensioners across England and Wales will be eligible for a 2025 Winter Fuel Payment on the basis that their annual income does not exceed £35,000.
The Winter Fuel Payment for winter 2025 will be available to those born before 22 September 1959 with the amounts paid ranging from £100 – £305.10 and exact amounts being dependent on individual circumstances.
In a similar fashion to the High Income Child Benefit Charge (HICBC), if Winter Fuel Payment recipients have an annual income above £35,000, they will be required to repay any amounts received either through PAYE or through the self-assessment system.
There is, however, significant contrast between the criteria and level of clawback between the two benefits.
Unlike the HICBC where the benefit is repaid at 0.5% increments for every £100 of ‘adjusted net’ income in excess of £60,000, state pensioners who receive a Winter Fuel Payment with income of just £1 above £35,000 will be required to fully repay what they have received. Furthermore, the £35,000 repayment threshold is based on an individual’s total taxable income so in contrast to the HICBC, the assessable income level cannot be reduced to take account of any gift aid donations or personal pension contributions in the tax year.
For those pensioners not within the self-assessment tax system who are required to repay Winter Fuel Payments, any amount due back to the Government will be collected via a PAYE tax code adjustment in the 2026/27 tax year.
Any individuals who are eligible for a Winter Fuel Payment due to their date of birth but anticipate an income in excess of £35,000 have the option to opt-out prior to 15 September 2025. If you would like to opt out of receiving the Winter Fuel Benefit or find out whether you would be liable to clawback for all or any of the Winter Fuel Payment, you can do that via the HMRC website.
If you require assistance or advice in respect of your personal tax affairs, remitting overseas income to the UK, or any area of PAYE or self-assessment, the RPGCC Tax Team are here to help. You can contact us on 020 7870 9050 or email us and a member of our team will get back to you as we can.
How do RPGCC turn personal tax planning and compliance into a positive?
Understanding what you need to do at every stage is all part of our service – and, in fact, we can turn personal tax planning and compliance into a positive.
If you think carefully about the ownership of your assets, and time their disposal or acquisition, there are savings to be made. Tax planning also involves identifying reliefs and allowances you might be able to claim to keep your tax bill down.
We’ll help plan your tax affairs and make everything make sense. We’ll help with income tax, capital gains tax (CGT), inheritance tax planning, non-domiciliary tax issues, and even National Insurance.
Once we’ve helped you, you’ll feel stronger, more secure and in control of your personal tax affairs.
However, remember, don’t be afraid to ask us questions along the way. Personal taxation is by nature very specific to you, so we’ll do our best to make sure your situation is properly understood and will always focus on you.
If you would like to book a meeting with one of our specialist tax advisers, or if you would like to speak to a member of our private client tax team, contact us today on 020 7870 9050 or you can visit our contact us page and arrange a call back.
