HMRC bungles 2026/27 PAYE codes for pensioners

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.