Tax on winter fuel payment ?

[Meg201]

I am just retired and have received my winter fuel payment today. Do I pay tax on this .
Many thanks
Ian

[niord]

I am just retired and have received my winter fuel payment today. Do I pay tax on this .
Many thanks
Ian

No, the winter fuel payment is not considered to be taxable income

[Alaric]

I am just retired and have received my winter fuel payment today. Do I pay tax on this .

Whilst there might be a case for clawing back some of the award to "richer" pensioners, no government has ever had the courage to propose it.

[Lootman]

Whilst there might be a case for clawing back some of the award to "richer" pensioners, no government has ever had the courage to propose it.

It would be ridiculous to means test millions of people for such a small amount. It is cheaper just to give it to everyone over a certain age, just like the state pension.

[Alaric]

It would be ridiculous to means test millions of people for such a small amount. It is cheaper just to give it to everyone over a certain age, just like the state pension.

Like the State Pension, it could just be added to taxable income, So if taxable income is above the frozen personal allowances it gets taxed at 20% or 40%.

I think we are still waiting for a Government or for that matter opposition statement as to what happens when the tripled locked increasing State Penion overtakes the frozen Personal Allowance.

[mc2fool]

It would be ridiculous to means test millions of people for such a small amount. It is cheaper just to give it to everyone over a certain age, just like the state pension.

Like the State Pension, it could just be added to taxable income, So if taxable income is above the frozen personal allowances it gets taxed at 20% or 40%.

Or if the govt were of a mood to, they could simply just apply a "High Income Winter Fuel Payment Charge" akin to the already existing "High Income Child Benefit Charge" mechanism, under which if either parent/partner's income is over £50K then they get taxed by 1% of the family's child benefit for every £100 of income over £50K.

The end effect is that families with either parent/partner earning over £50K start to get their child benefit clawed back in their income taxes, and lose it all if their income is over £60K (and so some in that situation decide to opt out of receiving it in the first place.) I can't imagine it'd take too much of a lightbulb moment in the Treasury for some bright spark to suggest doing the same with the winter fuel payment ...

[Lootman]

Like the State Pension, it could just be added to taxable income, So if taxable income is above the frozen personal allowances it gets taxed at 20% or 40%.

Or if the govt were of a mood to, they could simply just apply a "High Income Winter Fuel Payment Charge" akin to the already existing "High Income Child Benefit Charge" mechanism, under which if either parent/partner's income is over £50K then they get taxed by 1% of the family's child benefit for every £100 of income over £50K.

But is it really worth it for a payment that might only be £100 in a normal year (which last year was not; I think I got £500)? The revenue take would be small and so the only reason to do it would be a rather spiteful desire to not give any benefit to someone who is well off.

There is also the tax-free £10 Christmas gift payment if they want to be even more petty.

The child benefit is a more significant sum, or at least was back when my wife collected it.

But with separate taxation of spouses how does the taxman easily check what a spouse's income is? Or harder still, what a non-married partner's is?

[Gerry557]

It would be ridiculous to means test millions of people for such a small amount. It is cheaper just to give it to everyone over a certain age, just like the state pension.

Like the State Pension, it could just be added to taxable income, So if taxable income is above the frozen personal allowances it gets taxed at 20% or 40%.

I think we are still waiting for a Government or for that matter opposition statement as to what happens when the tripled locked increasing State Penion overtakes the frozen Personal Allowance.

The personal allowance was much smaller a few years back..... Then again so we're pensions.

Get them minimum wagers paying tax too.

[Urbandreamer]

I think that a quick clarification is in order.

The state pension is NOT a "benefit". It is a paid for entitlement. You need to PAY for it over a number of years.
The winter fuel payment IS a benefit. You need to survive to be old enough to claim it.

The state pension, currently, IS taxable. It's just that it currently is less than the personal allowance.
I think that most "benefits" are not taxable. But could be proven wrong.

I have, in the past, pointed out that no "PAYE" mechanism exists to reclaim said tax from state pension payments. Which will become a headache for HMRC and those required to live off the state pension in the future. I.E when the state pension exceeds the personal allowance.

But that is a different matter from the thread topic.

[Meg201]

Many thanks for the answers and insights of the possible future of tax on benefits / pensions. Ian