Winter Fuel Payment and taxation

Dazed_and_C0nfused

Poze2 said:

Ok thanks for your reply.
I know that both pensions and untaxed savings are taxable income and are included in the calculations.

I wasn’t sure if the personal tax free allowance, was deducted from all those amounts to establish gross taxable earnings. 

Nope, not a factor for WFP tax.

nrcbennett

Hi, what about the 25% tax free pension lump sum, do you know would that be classed as ‘income’ for purposes of the £35k winter fuel payment threshold? Thanks for everyone’s advice.

eskbanker

nrcbennett said:

Hi, what about the 25% tax free pension lump sum, do you know would that be classed as ‘income’ for purposes of the £35k winter fuel payment threshold? Thanks for everyone’s advice.

The bolded wording in this earlier post answers that:

https://forums.moneysavingexpert.com/discussion/comment/81542999/#Comment_81542999

Dazed_and_C0nfused

nrcbennett said:

Hi, what about the 25% tax free pension lump sum, do you know would that be classed as ‘income’ for purposes of the £35k winter fuel payment threshold? Thanks for everyone’s advice.

No, it isn't taxable income so completely irrelevant.

nrcbennett

Thanks Dazed, I was slightly confused by the statements that untaxed interest counted. But I guess ‘untaxed’ is one thing and ‘tax free’ is another. If true, I guess interest on a cash ISA also would NOT count as income for winter fuel payment eligibility.

Dazed_and_C0nfused

nrcbennett said:

Thanks Dazed, I was slightly confused by the statements that untaxed interest counted. But I guess ‘untaxed’ is one thing and ‘tax free’ is another. If true, I guess interest on a cash ISA also would NOT count as income for winter fuel payment eligibility.

Tax free is a much abused phrase.

Tax exempt interest such as that from a Cash ISA is irrelevant.

But all taxable interest from non ISA accounts is relevant.  The fact that it might be taxed at 0% doesn't matter.  It's still part of your taxable income.

Marmaduke123

SiliconChip said:

If your income is very close to the higher rate limit then it appears you might be tipped over

If your taxable income is more than £35,000

HMRC will take back all of your Winter Fuel Payment through either PAYE or your Self Assessment tax return.

https://www.gov.uk/winter-fuel-payment/how-much-youll-get

There is a process to opt out, which you'll need to do before 15th September.

https://www.gov.uk/winter-fuel-payment/report-change-circumstances

Thanks for the opt out link. I wasn't aware of the date limit

lr1277

I am hoping somebody can advise on the following.
i help my mum submit her tax return. For the year 25/26 she will be very close to or above the £35k threshold.
I read overpayments can be returned through a change in the tax code. Is it also possible to return the money through a self-assessment tax return?
If so where on the SA form do I enter the figure for this allowance?
Or should we just let it play out through the tax code?

flaneurs_lobster

lr1277 said:

I am hoping somebody can advise on the following.
i help my mum submit her tax return. For the year 25/26 she will be very close to or above the £35k threshold.
I read overpayments can be returned through a change in the tax code. Is it also possible to return the money through a self-assessment tax return?
If so where on the SA form do I enter the figure for this allowance?
Or should we just let it play out through the tax code?

Would it not be simpler to just opt-out?

Dazed_and_C0nfused

lr1277 said:

I am hoping somebody can advise on the following.
i help my mum submit her tax return. For the year 25/26 she will be very close to or above the £35k threshold.
I read overpayments can be returned through a change in the tax code. Is it also possible to return the money through a self-assessment tax return?
If so where on the SA form do I enter the figure for this allowance?
Or should we just let it play out through the tax code?

I thought the announcement was that if you file a Self Assessment return then it is, where necessary, paid back via Self Assessment.

And presumably if she owes less than £3,000 and her tax code can support it any Self Assessment liability can be coded out as per existing rules.

I don't think HMRC release future years tax returns in advance.  But I very much doubt they will forget to include a box for it 😳

Anyone who files a tax return would always have to show it on there anyway (if income was >£35,000) as a tax code is only ever provisional in the first place.