Author: Glenn

Struggling with late-paying customers? The VAT Cash Accounting Scheme helps protect cash flow by taxing only what you have received.

The VAT Cash Accounting Scheme is designed to support businesses by improving cash flow. Using this scheme means that VAT is only paid when your customer pays you and not when you issue an invoice. This means that if a customer fails to pay, the VAT is not payable to HMRC, offering a clear advantage for businesses that sell on credit.

In contrast, under standard VAT accounting, VAT is due whether or not you've been paid, which can create financial pressure if your customer is late in paying or does not pay.

To join the scheme, a business must have a VAT taxable turnover of £1.35 million or less in the next 12 months. Once in the scheme, a business can continue using it until their turnover exceeds £1.6 million.

You cannot use the Cash Accounting Scheme if:

• You are behind on VAT returns or payments.
• You have committed a VAT offence in the last 12 months.
• You are using the Flat Rate Scheme, which has its own method for handling VAT on a cash basis.

There’s no formal application required. You can start using the scheme:

• At the beginning of any VAT accounting period, or
• From the start of VAT registration, if you’re newly registered.

You can leave the scheme voluntarily at the end of any VAT period without notifying HMRC and rejoin again if you continue to meet the eligibility criteria.

From April 2024, the cash basis is the default method for sole traders and most partnerships when preparing Self-Assessment returns. Designed to simplify tax reporting, the cash basis lets businesses record income and expenses when money actually moves, easing the admin burden for many. Those who prefer or need traditional accruals accounting must actively opt out when submitting their tax return.

Businesses that prefer traditional accruals accounting or who are ineligible for the cash basis, must opt out of the cash basis when submitting their self-assessment return.

A number of other changes to the cash basis took effect from April 2024. This included the following:

• The removal of the turnover thresholds for businesses to use the cash basis.
• The removal of the restrictions on using relief for losses made in the cash basis, aligning the rules with accruals.
• Interest restrictions have been removed so both cash basis and accruals accounting are subject to the same tax rules.
• People with more than one business are able to choose whether they use the cash basis or accruals accounting for each business they have, rather than having to pick one method for all their businesses.

The cash basis is not available to limited companies and limited liability partnerships.

Buying tools or clothing for your job? You could claim tax relief. Check if you qualify and how to get your money back. If you have spent your own money on items essential for your work, such as tools or specialist clothing, HMRC may allow you to claim tax relief, even up to four years after you paid. There are two ways to make a claim, and it might be simpler than you think.

You may be able to claim tax relief on:

• Cleaning, repairing, or replacing specialist clothing (e.g. uniforms, safety boots).
• Repairing or replacing small tools needed for your job (e.g. scissors, screwdrivers).

However, you cannot claim for the initial cost of purchasing uniforms, tools or specialist work clothing.

There are two options for making a claim:

1. Claim the actual amount
   • You’ll need to provide receipts or proof of purchase.
   • Submit your claim under ‘Other expenses’ online at https://www.tax.service.gov.uk/claim-tax-relief-expenses/what-claiming-for.
2. Claim a Flat Rate expense / deduction
   • Use this if your job qualifies for a standard fixed amount.
   • There is no need to provide receipts.
   • Claim under ‘Uniform, work clothing and tools’ in the same online portal mentioned above.

If you complete a self-assessment return, you must claim through your tax return instead.

You cannot claim tax relief on PPE (e.g., gloves, hard hats, goggles). If your job requires PPE, your employer must provide it for free or reimburse you for any purchase.

This tax relief is designed to support employees with essential job-related costs and so it’s worth checking if you are eligible to claim.

A recent tribunal clarified the procedural powers of the Certification Officer (CO), ruling that applications from trade union members cannot be refused simply because they are deemed "unarguable". After becoming Chair of a prestigious university, the appellant faced three internal complaints from other members/staff of the UCU involving bullying; a complaint regarding his decision not to permit a motion for an AGM at an EGM; and a data protection breach complaint from three managers after he included information about them.

All three complaints were investigated and upheld by an NEC panel of the UCU on 13 December 2021. The UCU rules, specifically 6.1 and 13.1, outline obligations for members to abide by the rules, refrain from detrimental conduct, and provide for disciplinary procedures, including censure, barring from office, suspension, or expulsion for breaches of rules or detriment to the UCU's interests.

On the 6th September 2022, the appellant submitted nine applications to the CO, alleging that the disciplinary procedure applied in his case had been unlawful, although the CO refused to accept these on the grounds that they were "not arguable" and a tribunal appeal followed. The tribunal ruled that the applications should be remitted to the CO due to the fact that the case did not meet the criteria for striking out under Section 256ZA, ruling that the CO erred in law. The CO's power to "refuse to accept" an application under Section 108B of the Trade Union and Labour Relations (Consolidation) Act (TULRCA) 1992 is narrowly confined to those instances where the CO is unsatisfied that the applicant has exhausted internal union complaints procedures. The phrase "unless he is satisfied" in Section 108B(1) means that if the CO is satisfied that internal procedures have been exhausted, he or she cannot refuse to accept the application on that ground. The primary mechanism for striking out applications on substantive grounds is Section 256ZA(1). Crucially, this section requires a "show cause" notice under Section 256ZA(4) – giving the applicant an opportunity to explain why their application should not be struck out.

This judgement reaffirms the procedural powers of the CO when handling applications against trade unions, strongly reinforcing the requirement for due process, specifically the "opportunity to be heard" before an application can be dismissed. This important case clarifies that, once internal union procedures are exhausted, the CO must accept any application and commence inquiries, even if those inquiries might later lead to a formal strike-out process with proper safeguards.

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.