Author: Glenn

Have you set up a suggestion scheme for ideas that could save or earn you money? Employee suggestion schemes can offer up to £5,000 tax-free for valuable input — and even £25 for smaller efforts. A win for innovation and your employee payslip!

An employee suggestion scheme can offer many advantages for businesses, not only in terms of the valuable insights and innovations employees contribute but also through the potential for significant tax-free rewards. These schemes can help businesses save money, drive new business, and foster a culture of continuous improvement, all the while offering employees incentives for their contributions.

HMRC outlines two types of awards that businesses can offer employees under such schemes:

1. Encouragement Awards – These are given for good suggestions or to reward employees for special efforts. Encouragement awards are exempt from both tax and National Insurance contributions up to a limit of £25. Any amount paid above £25 will need to be processed through the payroll and taxed accordingly.
2. Financial Benefit Awards – These are offered for suggestions that have the potential to save or generate money for the business. The financial benefit awards are exempt from tax up to a generous cap of £5,000. The exempt amount is determined by the greater of:
   • 50% of the money you expect the suggestion to save or generate for your business in the year following its implementation.
   • 10% of the money you expect the suggestion to save or generate for your business over the first five years after its implementation.

In addition to these conditions, there are other reasonable criteria that must be met for the payments to be considered tax-free. These criteria are designed to ensure that the awards are made in a structured and transparent manner.

Swapped an old fridge or carpet in your rental property? Landlords can claim tax relief on replacing domestic items – but not if it's an upgrade! Know the rules and save money by claiming what you are entitled.

The replacement of domestic items relief allows landlords to claim tax relief when they replace movable furniture, household appliances, and other domestic items in a rental property. This relief is available for various items, including free-standing wardrobes, carpets, curtains, televisions, fridges, and crockery.

The amount of the deduction depends on several factors:

• The cost of the new replacement item, which is limited to the cost of an equivalent item if it represents an improvement over the old one (i.e., beyond the reasonable modern equivalent); plus
• the incidental costs associated with disposing of the old item or acquiring the replacement; minus
• any amounts received from disposing of the old item must be deducted from the total claimable amount.

A key aspect of this relief is distinguishing between a "replacement" and an "improvement." If the new item is deemed an improvement over the old one, the allowable deduction is limited to the cost of purchasing an equivalent item of similar type and function.

HMRC’s internal guidance provides an example highlighting the fact that a brand-new budget washing machine costing circa £200 is not an improvement over a 5-year-old washing machine that cost around £200 at the time of purchase (or slightly less, considering inflation).

If the replacement item is a reasonable modern equivalent, such as replacing an old fridge with a new energy-efficient model, this would not be considered an improvement, and the landlord can claim the full cost of the new item under the relief.

This relief helps landlords offset the costs of maintaining and upgrading rental properties, provided the replacement is for an equivalent item rather than an enhanced or more expensive upgrade.

Struggling with unpaid invoices? If you've paid VAT to HMRC but never received payment from your customer, you may be able to reclaim that VAT. Learn how bad debt relief works and whether switching to cash accounting could ease your VAT woes.

The VAT bad debt relief provisions enable businesses to reclaim VAT that has been paid to HMRC when a customer fails to pay for goods or services within a reasonable period. This typically applies when an invoice has been issued, but payment has not been received for an extended period (usually six months after the due date).

Under standard VAT accounting procedures, businesses are required to account for VAT at the time an invoice is issued, regardless of whether payment has been received. However, businesses can claim bad debt relief if specific conditions are met.

The primary conditions for claiming bad debt relief, as outlined in HMRC’s guidance, include:

1. The VAT on the supply must have already been accounted for and paid to HMRC.
2. The debt must be written off in the business’s regular VAT accounts and transferred to a separate bad debt account.
3. The value of the supply must not exceed the usual selling price.
4. The debt should not have been paid, sold, or factored through a valid legal assignment.
5. The debt must remain unpaid for at least six months after the later of the payment due date or the supply date.

It is important to note that businesses using the cash accounting scheme, or those that use certain retail schemes, only account for VAT on the amounts they have actually received from customers. As such, businesses operating under these schemes are generally not required to make bad debt relief claims, as VAT is only paid once payment is received.

Small businesses experiencing significant issues with bad debts may find it beneficial to apply for the cash accounting scheme, as this can help mitigate VAT liabilities by deferring payment until the customer settles their debt.

Redundant? You could receive up to £30,000 tax-free, whether it’s statutory pay or a better deal from your employer. Know your rights, check the 2025-26 limits, and understand how your age and service affect your payout.

There is a tax-free threshold of £30,000 for redundancy payments, regardless of whether the payment is your statutory redundancy pay, or a more generous amount offered by your employer.

If you have been employed for two years or longer and are made redundant, you are typically entitled to redundancy pay. The legal minimum you are entitled to receive is known as "statutory redundancy pay." However, there are exceptions to this entitlement, such as if your employer offers to retain you in your current role or provide suitable alternative employment, and you refuse the offer without a valid reason.

The amount of statutory redundancy pay is determined by your age and length of service, and is calculated as follows:

• Under 22: Half a week’s pay for each full year of service
• Aged 22 to 40: One week’s pay for each full year of service
• Over 41: One and a half weeks’ pay for each full year of service

If you were made redundant on or after 6 April 2025, your weekly pay is capped at £719. A maximum of 20 years of service taken into account. The maximum statutory redundancy payment for the tax year 2025-26 is £21,519.

Employers may opt to offer a higher redundancy payment, or you may be entitled to an increased amount based on the specific terms outlined in your employment contract.

The UK government has announced a record-breaking £13.9 billion in research and development (R&D) funding for the coming year. This major investment is designed to drive innovation, create quality jobs, and support long-term economic growth across the country.

A large share of the funding, amounting to £8.8 billion, has been allocated to UK Research and Innovation (UKRI), which supports the UK’s leading scientific and technological projects. This funding will help deliver groundbreaking work across multiple sectors including life sciences, clean energy, and advanced engineering.

One of the headline projects includes research into new blood tests aimed at detecting dementia earlier. With nearly a million people in the UK affected by the condition, early diagnosis could make a big difference to treatment outcomes and overall quality of life. It would also help reduce pressure on health and care services.

Another key area of investment is renewable energy. The government is continuing its support for the construction of a new wind turbine test facility in Blyth, Northumberland. This project, which is receiving £86 million, is expected to boost the UK's capacity for clean energy development, support highly skilled local employment, and attract further private investment into the green economy.

The government sees this R&D investment as a central part of its broader 'Plan for Change', which aims to strengthen public services while encouraging economic opportunity and innovation. Officials believe that public investment in R&D often leads to a doubling of private sector investment over time. Evidence shows that businesses receiving R&D grant funding often experience more than 20 percent growth in both employment and turnover within six years.

Science and Technology Secretary Peter Kyle described the investment as a commitment to the future. He said innovation is central to solving society’s biggest challenges, from life-saving medical advances to tackling climate change. He also stressed that research and development plays a vital role in growing the economy and supporting public services across the UK.

This unprecedented level of funding shows that the UK is serious about its role as a global leader in science and technology. By supporting bold ideas and giving researchers the tools they need, the government hopes to unlock progress, create opportunity, and deliver real benefits for people and businesses throughout the country.