HM Revenue and Customs has confirmed that some state pensioners will see their tax bills rise automatically as payments are recovered through changes to their tax codes. The measure affects pensioners with annual incomes above £35,000 who receive Winter Fuel Payments and do not opt out.
How The Monthly Tax Deductions Will Work
Pensioners above the income threshold will not be asked to repay the money through a separate bill. Instead, HMRC will adjust their tax codes so the amount owed is collected through higher monthly tax payments.
A typical Winter Fuel Payment of £200 will lead to an extra tax charge of around £33 per month during the 2027 to 2028 tax year if payments from the 2026 to 2027 and 2027 to 2028 tax years are both recovered together.
According to Express, HMRC has already started recovering payments linked to the 2025 to 2026 tax year and has contacted affected pensioners about tax code changes that began in April.
The measure affects pensioners with annual incomes above £35,000 who receive Winter Fuel Payments and do not opt out.
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Tax Changes Will Apply Across The Uk
The recovery system applies across the United Kingdom. In Scotland, the payment is known as the Pension Age Winter Heating Payment, while Northern Ireland payments were made by the Department for Work and Pensions (DWP) on behalf of the Northern Ireland Executive.
HMRC remains responsible for collecting the money from pensioners who meet the income conditions and have not chosen to opt out.
For pensioners affected by the 2026 to 2027 tax year recovery, a £200 payment will result in around £17 extra tax per month. The amount will increase to around £33 per month in the following tax year as HMRC collects payments covering two years.
HMRC Explains The Tax Code Recovery Process
HMRC said: “If you receive payments in the 2026 to 2027 and 2027 to 2028 tax years: Unless you opt out of receiving the payment, we’ll collect your payments for the 2 tax years by changing your tax code for the 2027 to 2028 tax year.
“For example, if you receive a payment in each tax year of £200, we’ll deduct about £33 per month extra in tax in the 2027 to 2028 tax year.
“If you receive a payment for the tax year 2028 to 2029 or onwards, we’ll collect your payment by adjusting your tax code for the tax year in which you receive the payment.”
Pensioners who file Self Assessment returns will have the payment included in their tax documents. Online filers should check that the amount appears on their 2025 to 2026 return, while paper filers must include it before the relevant filing deadline.
Pensioners Warned About Winter Fuel Payment Scams
As recovery begins, HMRC has warned pensioners to watch for criminals pretending to represent the tax authority. The organisation said it will not send text messages or emails asking people to repay payments or provide bank details.
Myrtle Lloyd, HMRC’s Chief Customer Officer, said: “Criminals are great pretenders and often use fake letters, emails, calls and texts to impersonate HMRC and trick people into giving them money.
“I’d encourage anyone who’s unsure to use our online tool at GOV.UK to check whether and how their payment will be recovered – there’s no need to call us.”
Pensioners who want to avoid receiving the payment can opt out by completing the official form before 11.59pm on September 20, 2026, or by calling the Winter Fuel Payment helpline before 6pm on September 18, 2026.
