Tax on winter fuel allowance

Adyge349

Hi everyone. I've just done a draft self assessment for 25-26. I receive state pension, private pensions and rental income and have received winter fuel allowance. I'm over the limit for the WFA and it's included in my income. All fine, and I agree all calculations for income, BUT… the WFA is included in the figure to be taxed at 20% but it is also separately taxed at 100% so the whole £200 is payable as tax! Am I going crazy or am I being taxed twice on the WFA - 20% on one calculation and 100% on the second??

Isthisforreal99

It's not income so don't include it as such.

Adyge349

It's included automatically when you're over the limit and so becomes part of your taxable income. There is a question on the form asking if you received winter fuel allowance. I have no problem that the £200 is paid back by taxing at 100%, but I do have a problem with it being taxed at 20% and then again at 100%! In effect I'm paying £40 extra.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81965531#Comment_81965531

Are you 100% certain about that?

The Winter Fuel Payment itself isn't taxable income so although there would be £200 to pay that's it, there shouldn't be an extra £40.

Is this HMRC online Self Assessment or separate software?

Can you post a screenshot of the tax calc?

Isthisforreal99

https://forums.moneysavingexpert.com/discussion/comment/81965531#Comment_81965531

No one is expecting you to pay it back and also pay tax on it. In what box did you enter the £200?

As I understand it the WFA charge itself is prepopulated on Self Assessment therefore there is no need to include £200 again as taxable income.

Adyge349

This is the HMRC self assessment online which I always use.

Thank you for your feedback!

I'm going to go through the income figures again because you've made me doubt that it's in twice!

But it is classified as taxed income:

"plus Winter Fuel Payment charge £200.00 x 100% £200.00"

I've already opted out for this year so I don't have to check this again!

Will post my review when I've had coffee!

Adyge349

Yes, you're right….

The £200 @ 100% only appears once. It's not included in the overall income.

Thanks all for helping me to resolve this.