Most people who were eligible to receive the 2025 winter fuel payment, and did not opt out (see below), will have received it automatically in November or December 2025. Where the winter fuel payment charge applies, the full amount of the 2025 winter fuel payment will be clawed back through the tax system, either through the self assessment (SA) return or pay as you earn (PAYE), depending on the circumstances.

Winter fuel payments may be administered differently depending on where the person is resident in the UK. In Scotland, the winter fuel payment has been replaced with the pension age winter heating payment. The winter fuel payment charge applies UK-wide. 

The winter fuel payment charge 

Legislation providing for the winter fuel payment charge is included in the Finance Bill 20025-26 (cl55, Sch10). The Bill is currently working its way through Parliament and will become law once it receives Royal Assent. To learn more about the Bill, as well as links to the Bill and to further information, see ICAEW’s TAXguide 05/25.  

The charge applies with regard to the 2025 winter fuel payment where the person’s total income for 2025/26, before any deductions such as the personal allowance, exceeds £35,000. HMRC has published a calculator to help work out a person’s total income. The test is only applied to the recipient’s income and not to household income.  

However, the charge does not apply where the person was in receipt of any of the following benefits at any point during the week that commenced 15 September 2025: 

• income support;
• income-based jobseeker’s allowance;
• pension credit;
• income related employment and support allowance; and
• universal credit. 

Applying the charge: SA 

Where the person is within SA, the charge will be included, and the payment recovered, through their tax return for 2025/26. This is due to be submitted by 31 October 2026 (if on paper) or by 31 January 2027 (online).  

For online filers, HMRC will begin to pre-populate the return for the charge later in the year. The taxpayer is responsible for checking that their return includes the charge. If they believe that the charge applies, but it has not been pre-populated in their return, they should include it in their return.  

Taxpayers who file their tax return on paper will need to include it on their returns themselves.  

Applying the charge: PAYE 

If the person is not within SA, HMRC will include the 2025/26 charge in their PAYE tax code for 2026/27. For a typical payment of £200, HMRC will deduct approximately £17 per month.   

HMRC has advised that PAYE tax codes for 2026/27 issued in February 2026 may not include the charge. In this case, taxpayers do not need to take any action as they will receive an updated tax code in April 2026.  

Opting out of winter fuel payments 

It is possible to opt out of receiving winter fuel payments, rather than having them recovered through the tax system, and many people may have done this for the 2025 winter fuel payment. 

The Department of Work and Pensions (DWP), which requires a separate opt-out for each year, intends to publish an online form on GOV.UK in April 2026. Taxpayers in Scotland will be able to call Social Security Scotland to opt out; however, if they elected to opt out for 2025, that election remains in force for future years. We will cover opting out in more detail in a future article once the DWP form is available.  

Opting back in to winter fuel payments  

Taxpayers who opted out of receiving the 2025 winter fuel payment, but who now find that their 2025/26 total income will be below £35,000, can opt back in by contacting the DWP or Social Security Scotland (as appropriate). This must be done by 31 March 2026. Agents should consider advising clients to review their 2025/26 income before then. 

Further information 

• Winter Fuel Payment: Overview - GOV.UK
• Pension Age Winter Heating Payment - mygov.scot
• Paying back the Winter Fuel Payment - GOV.UK 
• Do I need to repay the Winter Fuel Payment?
• Winter Fuel Payments charge - GOV.UK
• Taxing and opting out of winter fuel payments | ICAEW