HMRC confirms automatic £200 tax charge for state pensioners under 80 | Personal Finance | Finance

HM Revenue and Customs (HMRC) has confirmed an automatic £200 tax charge for state pensioners under the age of 80 to claw back Winter Fuel Payments.

The government department has begun its recovery of Winter Fuel Payments for high income pensioner households across the UK. Almost two million people are expected to repay their winter 2025 payment due to their annual income being more than £35,000, and for most, the recovery of payments will be done by HMRC automatically. According to HMRC, a typical Winter Fuel Payment is £200 for pensioners under the age of 80 who live alone.

If your income exceeds £35,000 the Winter Fuel Payment will be taken back in full by HMRC, so if you received a £200 payment, you will pay approximately £17 per month extra in tax during the 2026 to 2027 tax year until the payment is recovered.

HMRC said: “For a typical Winter Fuel Payment of £200, PAYE customers with income more than £35,000 will pay approximately £17 per month extra in tax during the 2026 to 2027 tax year to recover their payment.”

HMRC has confirmed that payments will be taken back through a change in pensioners’ PAYE tax code, as of April 2026. For pensioners in Self Assessment who file online, the payment should instead be pre-populated in their 2025 to 2026 tax return, due by January 31, 2027.

HMRC said pensioners should check the payment is there and in cases where it’s not shown, it should be added manually. Those who file paper returns will need to add it to their tax return by October 31, 2026.

Explaining how the tax code change will work for basic rate taxpayers, HMRC said: “Your total income is £37,710. This is made up of £25,737 from a private pension and £11,973 from your State Pension. In December, you got a £200 Winter Fuel Payment. Your Personal Allowance is £12,570. We’ll reduce your tax free amount by:

“This is your total deductions. £12,570 (Personal Allowance) – £12,973 (total deductions) = –£403 of tax free allowance. Your new tax code is K39. This means you’ll pay extra tax on £399 of income. You’ll pay around £17 more tax per month.”

The automatic recovery of Winter Fuel Payments for those with an annual income exceeding £35,000 applies across the whole of the UK, including in Scotland where the payment is known as the Pension Age Winter Heating Payment and in Northern Ireland where payments were made by the Department for Work and Pensions (DWP) on behalf of the Northern Ireland Executive. In all cases, recovery is handled by HMRC.

The payment recovery only applies to pensioners who exceed the income threshold and didn’t opt out of getting the Winter Fuel Payment last year.

HMRC warned pensioners to be wary of scams as the recovery of Winter Fuel Payments is now underway and advised people to report any suspicious texts or emails.

The government department said: “To report a suspicious text claiming to be from HMRC, forward it to 60599. To report a suspicious email, forward it to phishing@hmrc.gov.uk. To report a scam phone call, visit GOV.UK.

“If you have had money stolen, contact your bank immediately and notify Report Fraud. In Scotland, contact police on 101.”