What SI 2026/610 does
The Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2026 (SI 2026/610), made 5 June 2026 and in force 7 July 2026, amends the Income Tax (Pay As You Earn) Regulations 2003 by inserting a new regulation 14BA.
The amendment gives HMRC the power to issue adjusted tax codes so that the Winter Fuel Payment Charge — a means-tested clawback introduced by Schedule 10 to the Finance Act 2026, which inserted section 681I into the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) — is collected through PAYE during the 2026–27 tax year. The parent power for the instrument is section 684 of ITEPA 2003. The instrument applies to the whole of the United Kingdom.
Without this amendment, HMRC would have had to collect the charge solely through Self Assessment or post-year adjustments. Regulation 14BA brings the collection mechanism in line with how other income-affecting charges are handled through the existing coding process.
- SI reference
- SI 2026/610
- In force
- 7 July 2026
- Tax year affected
- 2026–27
- Charge threshold
- Pensioners with total income above £35,000
- Inserted provision
- Regulation 14BA, PAYE Regulations 2003
- Underlying charge
- Section 681I ITEPA 2003 (Finance Act 2026, Schedule 10)
Who the charge falls on — and who it does not
The Winter Fuel Payment Charge is a charge on individual pensioners, not on their employer. It applies to those who receive a Winter Fuel Payment and have total income above £35,000 in the 2026–27 tax year.
HMRC identifies affected individuals and adjusts their tax code accordingly. The charge is recovered through the deductions the employer already makes under PAYE — it is not a separate levy, a new payroll cost, or an employer liability of any kind.
The employer's only involvement is operating the revised tax code that HMRC issues. This is the same process used for other HMRC coding adjustments, such as the collection of underpaid tax or the clawback of the High Income Child Benefit Charge.
What your payroll must do — and nothing more
When HMRC issues a revised tax code for an affected employee or director:
- Apply the new tax code in your payroll software.
- Deduct income tax at the revised rate from the next payment.
- Report deductions through Real Time Information (RTI) as normal — no new data items are required.
There is no new employer registration, no new RTI submission type, and no separate payment to HMRC. If your payroll software is up to date and you apply revised codes when you receive them, you are fully compliant.
How you will receive revised codes
HMRC issues coding changes in two ways:
- P9 (bulk coding run): Annual notices sent before the start of a tax year, or as a mid-year batch.
- In-year P9 notices: Individual coding change notices sent electronically through your payroll software or PAYE Online when HMRC updates a code during the year.
Most payroll software downloads new codes automatically if you have electronic coding notifications enabled. Check your software settings to confirm this is active from 7 July 2026 onwards.
Practical steps for employers
Most employers will need to take minimal action. The steps below cover the small number of cases where you have pensioner employees or directors who may be affected.
- Check electronic notifications are enabled. Ensure your payroll software is configured to receive PAYE coding notices electronically so revised codes are applied promptly.
- Apply revised codes when received. From 7 July 2026, if you receive a revised P9 or in-year coding notice for an employee, apply it at the next practicable pay run.
- Direct employee queries to HMRC. You cannot change a tax code without HMRC authorisation. If an employee disputes their code, direct them to their Personal Tax Account on GOV.UK or advise them to contact HMRC directly.
- No action needed for employees unaffected. If you do not employ pensioners above the £35,000 income threshold, you are unlikely to receive any revised codes in connection with this change.