The Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2026

Published: Wed 10th Jun 26

The Regulations amended the 2003 PAYE Regulations to grant HMRC authority for using PAYE coding to collect the Winter Fuel Payment Charge.

These Regulations, enacted by His Majesty's Revenue and Customs (HMRC), amend the primary Income Tax (Pay As You Earn) Regulations 2003 to authorize HMRC to implement PAYE coding adjustments specifically for the purpose of collecting the Winter Fuel Payment Charge throughout a tax year.

This amendment inserts a new regulation (14BA) allowing HMRC to determine taxpayer codes to ensure the income tax liability arising from the Winter Fuel Payment Charge is deducted from PAYE income during the year, and to manage any resultant overpayments.

Arguments For

Enables the efficient collection of the newly introduced Winter Fuel Payment Charge throughout the tax year using existing PAYE mechanisms, minimizing administrative friction.
Provides certainty for taxpayers by ensuring the charge is recovered gradually via payroll deductions when their income is paid, rather than as a lump sum assessment.
Legally implements provisions established by the Finance Act 2026 concerning the income tax treatment of winter fuel payments.

Arguments Against

Imposes a new administrative requirement on HMRC to issue and manage specific PAYE codes related to this charge, potentially increasing complexity in payroll processing.
Introduces a new mandatory tax charge (the Winter Fuel Payment Charge) that must be collected via PAYE, potentially reducing individuals' take-home pay incrementally throughout the year.
The mechanism relies on the payee not objecting to HMRC determining the code, which raises questions about the practical extent of taxpayer recourse if an error occurs in the initial determination.

STATUTORY INSTRUMENTS

2026 No. 610 INCOME TAX

The Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2026

Made

5th June 2026

Laid before the House of

Commons

10th June 2026

Coming into force

7th July 2026

This section presents the formal identification details for the Statutory Instrument.

It confirms the document is designated as 'The Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2026' under the Income Tax category, bearing the number 610 for the year 2026.

The key dates indicate it was made on June 5th, 2026, presented to the House of Commons on June 10th, 2026, and officially came into force on July 7th, 2026.

The Commissioners for His Majesty's Revenue and Customs make these Regulations in exercise of the powers conferred by section 684(1) and (2) of the Income Tax (Earnings and Pensions) Act 2003( 1 ) and now exercisable by them( 2 ).

This confirms the legal authority behind issuing these amendments.

The Commissioners for His Majesty's Revenue and Customs (HMRC) are creating these rules by using powers granted to them under specific subsections (section 684(1) and (2)) of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).

Citation and commencement

These Regulations may be cited as the Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2026 and come into force on 7th July 2026.

Regulation 1 establishes the official short title for this legal document, which is the Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2026.

It also legally confirms that the regulations become effective, or commence, on July 7th, 2026.

Amendment of the Income Tax (Pay As You Earn) Regulations 2003

-(1) The Income Tax (Pay As You Earn) Regulations 2003( 3 ) are amended as follows.

(2) After regulation 14B (determination of code in respect of high income child benefit charge) insert-

' Determination of code in respect of winter fuel payment charge

14BA. HMRC may determine a code, if and to the extent that the payee does not object, to secure that-

(a) income tax payable for a tax year by the payee by virtue of section 681I of ITEPA (winter fuel payment charge)( 4 ) is deducted from PAYE income of the payee paid during that year, and
(b) repayments are made in a tax year in respect of any amounts overpaid on account of income tax under that section for that tax year.'.

Regulation 2 enacts the main changes by amending the principal PAYE Regulations from 2003.

Specifically, it inserts a new regulation, 14BA, immediately following the regulation dealing with the High Income Child Benefit Charge (14B).

This new regulation empowers HMRC to set a specific PAYE code for an individual if that person does not object.

The purpose of this new code is twofold: first, to ensure that income tax due under the Winter Fuel Payment Charge (defined in ITEPA by section 681I) is collected through deductions from the individual's ongoing PAYE income within the tax year.

Second, it allows the process to manage and issue repayments if too much tax was collected under this specific charge during that same year.

Myrtle Lloyd Justin Holliday

Two of the Commissioners for His Majesty's

Revenue and Customs

5th June 2026

This finalizes the instrument by showing the signatures of two Commissioners for HMRC, Myrtle Lloyd and Justin Holliday, attesting to the enactment of the regulations on the date they were made, June 5th, 2026.

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Income Tax (Pay As You Earn) Regulations 2003 (the 'PAYE Regulations'), which make provision for the assessment, charge, collection and recovery of income tax in respect of all pay as you earn ('PAYE') income.

Regulation 2(2) of these Regulations amends the PAYE Regulations to allow His Majesty's Revenue and Customs to use PAYE coding to collect the new winter fuel payment charge throughout the tax year in which it is paid. That charge was inserted into Part 10 of the Income Tax (Earnings and Pensions) Act 2003 by paragraph 1 of Schedule 10 to the Finance Act 2026.

A Tax Information and Impact Note covering this instrument was published on 26th November 2025 alongside clause 55 and Schedule 10 of the Finance (No. 2) Bill 2025 and is available on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins. It remains an accurate summary of the impacts that apply to this instrument.

The Explanatory Note clarifies that the statutory instrument modifies the existing PAYE Regulations, which govern how PAYE income is assessed, charged, collected, and recovered.

Specifically, the made amendment permits HMRC to utilize existing PAYE coding systems to gather the newly established Winter Fuel Payment Charge as income is paid during the tax year.

This charge itself originated from provisions added to the Income Tax (Earnings and Pensions) Act 2003 by the Finance Act 2026.

The Note directs readers to a previously published Tax Information and Impact Note from November 2025 for a detailed analysis of the instrument’s economic and administrative effects.

View Source

Economy Education Environment Science Transport

The Power to Award Degrees etc. (MLA College Ltd) Order 2026

Fri 23rd Oct 26

Authorized MLA College Ltd to grant taught awards and degrees in specific subjects for a four-year period starting 25 October 2026.

Economy Environment Infrastructure Transport

The Marine Licensing (Exempted Activities and Fees) (Amendment) Regulations 2026

Thu 22nd Oct 26

Adjusted marine licensing fees, introduced annual inflation-linked increases, and modified exemptions for activities affecting Highly Protected Marine Areas.

Economy Finance Justice Trade

The Over the Counter Derivatives (Intragroup Transactions) Regulations 2026

Thu 22nd Oct 26

Amended the EMIR Regulation to establish permanent notification and exemption procedures for intragroup derivative transactions involving UK and overseas entities.

Economy Justice Labour