HM Revenue & Customs (HMRC) has begun contacting around one million people who may have missed out on pension tax relief because their workplace pension scheme operates under a Net Pay Arrangement. Under Net Pay, pension contributions are deducted from earnings before income tax is calculated. This normally provides automatic tax relief at the individual’s marginal tax rate. However, for individuals earning below the Personal Allowance (currently £12,570), there is no income tax liability for the pension contribution to reduce. Consequently, these workers do not receive tax relief on their contributions.

By contrast, under a Relief at Source arrangement, contributions are taken after tax, and the pension provider claims a 20% basic-rate top-up directly from HMRC and adds it to the pension contribution. This means that even someone who does not pay income tax can receive the 20% basic-rate top-up.

The introduction of the Low Earner’s Pension Payment is intended to address this difference and ensure that lower-paid pension savers receive a more consistent level of tax relief, regardless of whether their workplace pension uses a Net Pay Arrangement or Relief at Source.

Who is affected?

HMRC estimates that around 1.2 million people are eligible for top-ups, with roughly three-quarters expected to be women.

You may be eligible if you:

• Contributed to a workplace pension using a Net Pay Arrangement; and
• Had total taxable income below (or close to) the Personal Allowance in the relevant tax year.

Eligibility applies from the 2024/25 tax year onwards and is assessed separately for each tax year, meaning some individuals may be entitled to payments covering multiple years.

How much could you receive?

HMRC estimates that eligible individuals will receive around £70 per year on average, although the actual amount will depend on their pension contributions and individual circumstances.

The top-up is paid directly to the individual and is intended to address the difference in tax relief received under the two arrangements. It does not change how workplace pension contributions are made.

What do you need to do?

HMRC will identify potentially eligible individuals and contact them directly, rather than individuals needing to make a claim.

HMRC’s latest guidance confirms that eligible individuals should wait to be contacted, either by post or through their Personal Tax Account. Once contacted, they should follow the instructions provided to receive the payment. There is no need to contact HMRC in advance or ask their employer or pension provider to make a claim on their behalf.

Payments relating to contributions made during the 2024/25 tax year will begin in the coming months, with HMRC taking a phased approach to the rollout through the remainder of 2026 and into early 2027.

HMRC has also confirmed that it will never ask individuals to transfer money in order to receive the payment, nor will it ask for PINs or passwords.

If you receive any correspondence from HMRC regarding this and would like help understanding what you need to do, please do not hesitate to get in touch with a member of the team.

Global markets experienced some fluctuations the past few weeks following the US attacks on Iran, with oil prices seeing the most noticeable increase, and it is likely that markets will remain volatile as the situation evolves.

Rising geopolitical tensions often lead to short-term movements in global financial markets, as investors weigh the potential implications for energy supply, oil prices, and inflation. While sudden fluctuations can feel unsettling, they are typically temporary responses to unfolding events rather than lasting changes to the long-term outlook for investments.

It’s important to remember that short-term movements are a normal part of the investment process; well-diversified portfolios built with resilience in mind are designed to weather such storms by spreading investments across a range of regions, sectors, and asset types.

History shows that markets have repeatedly navigated uncertainty, recovered from disruptions, and continued to progress as conditions stabilise. Therefore, reacting quickly to short-term market movements often does more harm than good. We encourage you to keep calm amid the uncertainty. Maintaining a long-term perspective has often proven to be the more effective approach for investors seeking sustainable growth over time.

As always, we are monitoring developments closely and if we believe any action is needed before your next scheduled review, we will contact you.

In the meantime, if you have questions or would like to talk things through, please reach out. We are here to provide guidance, reassurance, and support every step of the way.

Members of the Eldon team were delighted to attend the High Sheriff Youth Awards last month, celebrating young people across County Durham.

Organised by Point North (the community foundation for County Durham and Tees Valley), and supported by the High Sheriff of Durham, the Awards are presented each year to recognise the extraordinary contribution of local community groups. Winning groups are awarded funds to continue supporting young people across County Durham, Darlington, Hartlepool, and Stockton.

This year, Hardwick Hall Hotel in Sedgefield was transformed into a scene straight from Willy Wonka’s Chocolate Factory, truly bringing the magic of the evening to life. A total of £35,000 was awarded across twelve groups, helping them to continue with, and strengthen, their work. Many groups also spoke of using some of the funds to provide enriching residential trips and experiences, things which would simply be too costly for them to offer otherwise.

This year’s High Sheriff of Durham, Michael Poole, highlighted the importance of the groups’ work and continuing to support them:

“The judging panel were certainly tested by the extremely high calibre of the applications received. The awards aren’t about being perfect. They’re about stepping up, showing kindness, helping, and making a difference. That’s exactly what young people across this county are doing – supported every step of the way by incredible organisations that give them the space and guidance to thrive. What you’re all doing is what makes County Durham a stronger, kinder and more connected place.”

As an ongoing supporter of Point North, we were honoured to attend this year’s Awards and the team left with a real sense of pride in our communities (as well as far too much chocolate).

HM Revenue & Customs (HMRC) has updated its process for issuing tax refunds to employees and pensioners under PAYE. If you are due a refund, you may no longer receive it automatically and may need to claim it.

Previously, when HMRC issued a P800 tax calculation showing a refund was due, they would automatically send a cheque in the post if you did not claim the refund online within 21 days.

This process has now changed. HMRC has stopped issuing automatic cheques for most P800 refunds. If you receive a calculation showing you are owed money, you must now take action to claim it. If no claim is made, the money will remain with HMRC.

The Quickest Way to Claim

HMRC advises that the fastest way to check if a refund is due and to claim it is via the HMRC App:

1. Open the HMRC App and tap the ‘Pay As You Earn (PAYE)’ section.
2. If a refund is due, you’ll see a tax calculation and a green ‘Claim’ button.
3. Tap the button to submit your claim.
   • Bank Transfer: Funds are typically paid directly into your bank account within 5-10 working days.
   • Cheque: If you prefer a cheque, it can take up to 6 weeks to arrive.

If You Don’t Use Online Services

If you do not have access to the HMRC app or online account, you can still claim your refund using the instructions on your P800 letter.

You can claim via the government website here (you will need your P800 reference number and National Insurance number), or by calling HMRC directly.

Check Your Calculation Carefully

Before claiming any refund, it’s important to review your tax calculation to ensure the figures are correct. Common areas where errors occur include:

• Savings Interest: HMRC receives data directly from banks, but this can sometimes be incorrect or duplicated. Check that the interest figure matches your records and excludes any interest earned in ISAs (which is tax-free). If you hold joint accounts, check that only your share (usually 50%) is included.

• Pension Contributions: If you are a higher or additional rate taxpayer, check that your personal pension contributions are accurately reflected. Relief is not always applied automatically to contributions made outside of salary sacrifice schemes.

• Gift Aid: Ensure any charitable donations made under Gift Aid are included, as you may be entitled to additional tax relief.  

If you receive a tax calculation from HMRC and would like us to review it, please don’t hesitate to get in touch with one of the team.

Experienced sailors don’t wait for rough seas to think about how they’ll respond. They prepare in calm conditions, knowing storms are inevitable. Investors face the same reality. Market volatility is not a possibility, it’s a certainty, and preparation determines whether you stay the course or abandon ship at the worst moment.

Investors will almost certainly face periods of market stress. Over history, global equities have experienced regular downturns, including sharp falls driven by recessions, financial crises, political uncertainty, and global shocks.

What’s easy to forget in the middle of a downturn is that a bad spell doesn’t necessarily lead to a bad year, or a bad long-term outcome. Even after significant mid-year declines, markets have often recovered to finish the year higher or gone on to deliver strong returns in subsequent years. This reinforces a crucial lesson: reacting emotionally to market falls can be more damaging than the falls themselves.

We can’t control the weather at sea, just as we can’t control market movements. What we can control is how we respond to them. Avoiding panic, sticking to a well-considered plan, and remaining invested through market storms are often the most reliable ways to protect long-term outcomes.

Managing a discretionary trust comes with complex tax rules, and the recent Budget announcements mean some important changes are on the horizon.

We have provided a summary of the key changes below:

Discretionary Trust Income

The budget announced a 2% rate increase on dividends from 6^th April 2026 which apply to the ordinary and higher rates only. No changes were made to the dividend trust rate of 39.35%.

From 6^th April 2027, the tax rates on savings and property income received by discretionary trusts will increase by 2%. This means that the current trust rate of 45% for non-dividend income from discretionary trusts will increase to 47% where it relates to savings or property.

Chargeable Gains from Investment Bonds

Investment bonds are a popular option for discretionary trusts, partly due to the high rates of tax on other types of income, but also the administrative simplicity they provide. Trustees can make use of the tax deferred allowance to avoid triggering chargeable gains within the trust or can assign segments to beneficiaries prior to encashment. The Budget hasn’t impacted these tax planning strategies, but the taxation of bonds will change.

From 6^th April 2027, changes to how savings income is taxed will affect the way investment bonds held within discretionary trusts are taxed.

Where a chargeable gain is taxed on the settlor or a beneficiary, any part of the gain that exceeds their savings allowances will be taxed at the new, higher savings rates.

• Offshore bonds will continue to grow without tax being deducted internally. When a gain arises, it will simply be taxed at the new savings tax rates.

• Onshore bonds will be affected by an increase in the tax paid within UK life funds. The internal tax rate on non-dividend income will rise to 22%, while dividends will remain tax-free.

• When a gain arises on an onshore bond, the individual will receive a 22% tax credit to reflect tax already paid within the fund.
  • Basic rate taxpayers will have no further tax to pay.
  • Higher rate taxpayers will pay an additional 20%.
  • Additional rate taxpayers will pay an additional 25%.

• Top slicing relief will continue to be available for both onshore and offshore bonds. The rules have been updated so that, when calculating this relief, the tax treated as already paid will reflect the new tax rates.

What This Means for Trustees

These changes could impact trust distributions and investment strategies. Trustees should review their current arrangements and consider planning ahead to manage future tax liabilities.

If you would like to discuss anything raised in this article with one of the team, please do reach out.

As the festive season approaches, we’d like to let you know our opening hours over Christmas and New Year:

Eldon’s office will close at 2:00 pm on Wednesday 24^th December, reopening on Friday 2^nd January 2026 at 9am.

We’d like to take this opportunity to thank all our clients, colleagues and peers for their support throughout the year.

We wish you a very Merry Christmas and a Happy New Year!

Planning for the future isn’t just about saving money or investing wisely, it’s about making sure your wishes are respected when you’re no longer here. A will is a legal document that sets out your wishes for what happens to your money, property, and possessions after your death. It acts as your legal voice and ensures: 

• Your wishes are followed – You decide who inherits your money, property, and possessions.
• Protection for loved ones – Unmarried partners and stepchildren are not covered by intestacy rules, so a will safeguards them.
• Guardianship for children – You can name who will care for your children if they’re under 18.
• Tax efficiency – A well-drafted will can help reduce Inheritance Tax.
• Avoid family disputes – Clear instructions prevent arguments and confusion.
• Charitable giving – You can leave gifts to causes you care about.
• Control over special assets – From digital accounts to family heirlooms, you decide what happens.

Intestacy

Intestacy occurs when someone dies without a valid will. Their estate (money, property, possessions) is then distributed according to a fixed legal hierarchy, not personal wishes. The rules vary from country to country. For example, Scottish law is very different to English law.

Under English law, intestacy rules apply to assets solely owned by the deceased; jointly-owned property (if held under joint tenancy, not tenants in common) and nominated benefits (like pensions) usually pass outside intestacy rules.

Who Inherits Under English Intestacy Rules?

1. Spouse or Civil Partner

• If there are no children, the spouse or civil partner gets everything.
• If there are children, the spouse/civil partner receives:
  • All personal belongings.
  • A fixed sum of £322,000 (called the statutory legacy).
  • Half of anything left over.
  • The other half is shared equally among the children.

2. Children

• If there’s no spouse or civil partner, children inherit everything equally.
• Includes biological and adopted children.
• Stepchildren do not inherit unless legally adopted.

3. No Spouse or Children

• The estate goes to relatives in a strict order:
  • Parents.
  • Brothers and sisters (and their children).
  • Grandparents.
  • Aunts and uncles.
• If no relatives exist, the estate goes to the Crown.

Important Points

• Unmarried partners (even long-term) have no automatic right to inherit.
• Jointly owned property and nominated benefits (like pensions) usually pass outside intestacy rules.
• If no heirs are found, the estate becomes property of the Crown.

Why Make a Will?

Intestacy rules often don’t reflect modern family life. Without a will:

• Partners you live with may get nothing.
• Stepchildren are excluded.
• Your estate may be divided in ways that causes financial stress.

Making a will ensures your wishes are followed and loved ones are protected.

The other benefit of having a valid will in place is that you can also choose who you want your executors to be. Executors are the people who will carry out your wishes and manage your estate.

Their responsibilities include:

• Applying for probate.
• Collecting and valuing assets.
• Paying debts, taxes, and funeral costs.
• Distributing your estate to beneficiaries.

It’s therefore important that you opt for someone who is capable, in terms of understanding, but also having the time available to do this as it is a consuming role.

Reviewing Wills after Gifts

Another important consideration is reviewing your will after making significant lifetime gifts. These gifts are often part of estate planning and allow you to support loved ones during your lifetime rather than after your death. However, such gifts can alter the overall balance of your estate and may lead to unintended consequences if your will is not updated. Key areas to review include:

• Inheritance Tax (IHT) implications
  Gifts may remain in your estate for up to seven years under the “seven-year rule.” If you die within that period, they could still attract IHT and affect how much other beneficiaries receive. It’s therefore important to review the will alongside the gift and ensure there are no unintended consequences for other beneficiaries.

• Fairness among beneficiaries
  If one child receives a large lifetime gift and your will divides the estate equally, this can cause disputes. Your will should state whether gifts are to be treated as advancements or ignored when calculating shares of the estate. For example, all lifetime gifts made can be balanced in the first instance, then the estate split equally to ensure fairness (if this is the goal). You should also consider if the estate can be equally balanced too.

• Legal doctrines like ademption and portions
  If you gift an asset mentioned in your will (e.g., a property), that gift may “adeem,” meaning it no longer exists in your estate. Without updating your will, this can leave gaps or unintended beneficiaries.

Careful financial planning made during your lifetime can be undone by the lack of a valid will, or the execution of an out of date will. A will should be reviewed frequently to ensure that it continues to be line with your wishes and your estate passes as you wish.

How is the High Income Child Benefit Charge (HICBC) calculated?

Child Benefit is provided to households with eligible children. However, if the claimant or their partner has an adjusted net income above £60,000, the higher earner is required to repay some or all of the benefit, known as the High Income Child Benefit Charge (HICBC).

The charge is applied at a rate of 1% of the Child Benefit for every £200 of adjusted net income over £60,000. This means the benefit is fully clawed back once the adjusted net income reaches £80,000.

How is HICBC collected?

HMRC has launched a new service that allows taxpayers to pay the High Income Child Benefit Charge (HICBC) through PAYE, removing the need for many to complete a Self-Assessment tax return.

Previously, anyone who owed HICBC had to register for Self-Assessment, even if the charge was under £2,000 and could technically be collected via their PAYE code. Now, if you’re only in Self-Assessment to pay HICBC, you can opt out and have the charge collected automatically through your salary.

In 2022/23, around 440,000 people were liable for HICBC. HMRC will soon be writing to around 100,000 individuals who appear to owe the charge but aren’t in Self-Assessment, encouraging them to use the new PAYE option.

While this change removes the admin burden for many, it’s still important to keep an eye on your adjusted net income each year to ensure you’re meeting your HICBC obligations.

How to switch to PAYE for HICBC:

• First, de-register from Self-Assessment (HMRC won’t do this for you).
• You can then start using the HICBC PAYE service the next day.

A welcome step towards simplifying the tax system for busy families.

Taxpayers who need to pay HICBC for both 2024/25 and 2025/26 may end up with two sets of HICBC charges in one year’s PAYE code. This would be either their 2025/26 or 2026/27 PAYE code, depending on when they file their 2024/25 tax return and when they chose to use the HICBC PAYE service.

Individuals who complete Self-Assessment tax returns for other reasons will still need to do so.

Opting out of Child Benefit

If you or your partner’s income is over £80,000, your Child Benefit will be fully withdrawn through the High Income Child Benefit Charge (HICBC). In this case, you may choose to opt out of receiving Child Benefit payments to avoid the need to repay them.

There are several ways to do this:

• Via your online Personal Tax Account
• By completing an online form
• By phoning or writing to the Child Benefit Office

Please note: Agents cannot opt out on behalf of clients, the claimant must do this themselves.

Even if you don’t want to receive the payments, it’s still a good idea to register for Child Benefit. Why?

• The non-working or lower-earning parent may receive Class 3 National Insurance credits, which count towards their State Pension.
• Registration also ensures your child is automatically sent a National Insurance number before they turn 16.

This can be a wise move for long-term financial planning, even if no payments are made.

Autumn has already seen some great achievements at Eldon, which we’re pleased to share.

To kick off the season, Director of Operations and Chartered Financial Planner, Adam, won the 2025 ‘Deputy President’s Young Achiever of the Year Award’!

The accolade is awarded by the Chartered Insurance Institute, a key professional body in the insurance and financial planning profession. It was created to recognise and applaud outstanding achievements of those under age 35 within the industry, with a particular focus on professional excellence, delivering value to the profession, and championing career progression.

In October, Chartered Financial Planner, Beth, successfully completed the final exam needed to become a Fellow of the Personal Finance Society.

The Personal Finance Society is part of the Chartered Insurance Institute. Fellowship demonstrates that the holder has attained and maintained the most prestigious level of professional qualification that they award (the Advanced Diploma in Financial Planning). It is also a key indicator of ongoing commitment to professional standards and personal development, and it is a great achievement within the profession.

Well done to both, and may the success continue!