Winter fuel payments remain taxing, even if not taxable

Having recently confirmed its intention to review eligibility for winter fuel payments the UK Government will now need to come up with a new method for assessing who should receive the payments – unless it decides simply to reinstate the payments on a universal basis which seems unlikely given its other commitments on the UK economy.

While reinstating universal entitlement in itself would be a straightforward option means testing on an alternative basis could potentially introduce complexity and associated cost.

The Institute for Fiscal Studies considers several potential options for reform including reinstating universal entitlement to the payments but with amounts clawed back by making the payments taxable. As has been seen with the High Income Child Benefit Charge where amounts paid are recouped via the tax return (indeed requiring some individuals to file a return for this reason alone) this is...