Author: Glenn

The government has announced the reinstatement of Winter Fuel Payments for pensioners in England and Wales for winter 2025–26, reversing the previous year's cuts. Around nine million pensioners are expected to benefit from this decision, with payments of £200 per household or £300 for households where someone is aged 80 or over.

Eligibility will be based on age and income. Anyone who has reached State Pension age by the qualifying week of 15 to 21 September 2025 and earns £35,000 or less will receive the payment automatically. Pensioners with higher incomes will still receive the payment but may have it recovered through the PAYE or Self-Assessment systems. Alternatively, they can opt out of receiving the support altogether.

The move is part of a broader attempt to provide targeted help to those most in need while managing public finances responsibly. The scheme is expected to cost around £1.25 billion, but by introducing means-testing for higher earners, the government aims to save approximately £450 million compared to the previously universal scheme.

The decision follows public concern about last year’s removal of the payment, which had a significant impact on many lower-income pensioners. It has been welcomed by pensioners' groups and campaigners who argued that older people should not be left without support during the winter months.

In a significant update, the UK government has unveiled a new compensation scheme targeting individuals affected by the earlier “Capture” software, used in over 2,000 Post Office branches during the 1990s. This programme aims to redress those who suffered financial losses prior to the widely known Horizon IT scandal.

Background on Capture

Before Horizon, the Post Office operated the Capture system during the mid-1990s. This legacy software generated accounting records that later allegations suggest were sometimes erroneous, triggering investigations and prosecutions of postmasters, even though the data was flawed.

Scheme details and timeline

The scheme is scheduled to launch in autumn 2025. It will begin with a pilot phase involving around 150 applicants, allowing processes to be refined before a wider rollout. The focus will be on providing fair compensation for financial shortfalls suffered due to faulty Capture software between 1992 and 2000.

Context within broader Post Office compensation efforts

To date, over £1 billion has been paid to more than 7,300 postmasters who suffered losses under the Horizon system. The Horizon Shortfalls Scheme Appeals process also began in May 2025. Although these efforts have been significant, they have only addressed Horizon-era cases. Victims of the earlier Capture system have, until now, received no compensation.

Why this matters

This announcement is a key step toward justice for early victims. A previously unreleased independent report has recently resurfaced, highlighting flaws in the Capture system and renewing pressure on the Post Office and government to act. Parliament’s business and trade committee has urged the Post Office to disclose all records relating to Capture convictions and prosecutions.

Government comment

The Department for Business and Trade has stated that the scheme will be fair and accessible. It is intended to deliver swift redress, with initial payments expected in autumn 2025. This move complements the existing Horizon redress work, which has already delivered over £1 billion in compensation.

Looking ahead

Applications for the Capture scheme will open in autumn 2025, starting with a smaller pilot group before full implementation. Detailed guidance and application forms will be issued in due course. The Post Office is expected to cooperate fully by releasing all relevant documents to support claims and help correct the historical record.

Streamline your VAT reporting with fewer returns and smoother cash flow. The Annual Accounting Scheme makes VAT easier to manage for eligible small businesses.

The VAT Annual Accounting Scheme is designed to simplify VAT reporting for smaller businesses with an annual taxable turnover of up to £1.35 million. One of the main advantages of the scheme is that it requires businesses to submit only one VAT return per year, significantly reducing the administrative time and costs typically associated with preparing and filing quarterly returns.

Helping to meet the needs of small businesses, the scheme can be used alongside either the VAT Flat Rate Scheme or standard VAT accounting. It also allows for regular interim VAT payments throughout the year, helping businesses smooth out their cash flow and avoid large, unexpected VAT bills.

To be eligible to join the scheme, a business must be solvent, new to the scheme, and up to date with all VAT payments. However, it cannot be a division of a larger company or part of a VAT group.

Once enrolled, a business will make interim payments based on the previous year’s VAT liability. For newly VAT-registered businesses, these payments are calculated using an estimated annual VAT liability. At the end of the 12-month VAT accounting period, a final balancing payment is made when the annual VAT return is submitted. This final return can often be completed in tandem with the business’s annual accounts, streamlining year-end reporting.

The final balancing payment must be submitted within two months of the end of the accounting period. Businesses can continue to use the scheme provided their taxable supplies remain below £1.6 million and they continue to meet the scheme’s other eligibility requirements.

Once your income passes £100,000, your tax-free allowance starts to shrink. Between £100,000 and £125,140, the effective tax rate climbs to 60%, but smart planning can help.

If you earn over £100,000 in any tax year your personal allowance is gradually reduced by £1 for every £2 of adjusted net income over £100,000 irrespective of age. This means that any taxable receipt that takes your income over £100,000 will result in a reduction in personal tax allowances.

Your personal Income Tax allowance would therefore be reduced to zero if your adjusted net income is £125,140 or above. Your adjusted net income is your total taxable income before any personal allowances, less certain tax reliefs such as trading losses and certain charitable donations and pension contributions.

If your adjusted net income is likely to fall between £100,000 and £125,140 your £12,570 tax-free personal allowance is gradually tapered. This tapering continues until your allowance is fully withdrawn at an income level of £125,140. This effectively results in a 60% marginal tax rate on income between £100,000 and £125,140.

For example, if your adjusted net income is £110,000, you would lose £5,000 of your personal allowance. This additional £5,000 is taxed at 60% due to the combined effect of the 40% higher rate of Income Tax and the partial loss of the personal allowance.

If your income sits within this band you should consider what financial planning opportunities are available in order to avoid this personal allowance trap by trying to reduce your income below to £100,000. This can include giving gifts to charity, increasing pension contributions and participating in certain investment schemes.

The government’s 2025 Spending Review outlines a major funding boost for healthcare, defence, housing, and infrastructure to support long-term recovery and growth.

The 2025 Spending Review was published on 11 June 2025 and outlines the government's plans to support the country’s recovery by investing in security, health, and the economy. It sets budgets for government departments up to 2028–29 for everyday spending, and up to 2029–30 for long-term projects like infrastructure. Overall, departmental budgets will grow by 2.3% during this period. The review also sets funding levels for the devolved governments in Scotland, Wales, and Northern Ireland.

This includes a £29 billion investment to revitalise the NHS. The funding aims to modernise the health service, address backlogs, and future-proof care delivery. Specifically, up to £10 billion will be used towards digital transformation and technology. This will include measures to expand GP training to deliver millions more appointments, enhance mental health services in schools.

Beyond healthcare, the Spending Review also set out substantial investments in defence, infrastructure, housing and energy security. This includes £15 billion for a nuclear warhead programme and £6 billion for munitions manufacturing. Border security and asylum processing are also set for major upgrades.. Border security and asylum processing are also set for major upgrades.

The government will also channel billions into local transport, rail links, and regional regeneration projects, while launching the largest social and affordable housing programme in a generation with £39 billion over ten years. The devolved administrations will receive their largest real-terms settlements since devolution began in 1998 to help ensure that locally tailored priorities are funded robustly.