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.

Use a company car for personal trips? Avoid a hefty tax charge by reimbursing your employer for private fuel by 6 July 2025. It’s called “making good” – and it could save you a chunk in tax if your private mileage is low.

To avoid the car fuel benefit charge, an employee must "make good" the cost of all fuel used for private journeys no later than 6 July following the end of the relevant tax year. This means that the employee needs to reimburse the employer for any private fuel used during the 2024-25 tax year by this deadline to prevent any tax liabilities related to the fuel benefit.

When an employee is provided with fuel for private use in a company car, the default rule is that the employee is required to pay the car fuel benefit charge. This charge is calculated based on the car's CO2 emissions rating and is applied to the car fuel benefit multiplier. This has just increased to £28,200 for 2025-26 (2024-25: £27,800).

However, the car fuel benefit charge can be avoided if the employee repays the employer for all private fuel, a process known as "making good." Private fuel use includes fuel used for commuting to and from work.

By making good, HMRC will accept that no car fuel benefit charge applies, allowing the employee to avoid the income tax charge on private car fuel. Typically, it is more beneficial for an employee to reimburse the employer for the private fuel rather than pay the Income Tax charge, especially if private mileage is low.

If the employee does not demonstrate that they have repaid all fuel costs associated with private journeys (including commuting), the car fuel benefit charge will still apply. Therefore, it is crucial for employees to maintain accurate records of private mileage and ensure that all fuel costs for private use are fully repaid by the deadline to avoid unnecessary tax charges.

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.

The UK’s Business and Trade Secretary, Jonathan Reynolds, has set out the government's position following the United States' recent imposition of new tariffs on UK exports. These include a 10% reciprocal tariff on British goods and a separate 25% global tariff on cars — moves that have prompted concern among UK manufacturers and exporters.

Reynolds told Parliament he was disappointed by the decision, particularly given the close trading relationship between the two countries. While the US has already imposed a 25% tariff on steel, aluminium, and related products since March, the latest action extends the economic pressure and signals a hardening stance from Washington.

Despite the setback, the Trade Secretary struck a calm and constructive tone, saying the UK will continue to act in the national interest while standing behind domestic industries. He confirmed that UK officials are in ongoing talks with key figures in the US administration, including the Secretary of Commerce and the US Trade Representative, in an effort to rebuild a more stable and mutually beneficial trading relationship.

Reynolds was clear that the government is not seeking to inflame tensions but is preparing for all eventualities. A new public consultation has been launched, inviting businesses and stakeholders to give their views on the impact of the tariffs and to suggest potential UK responses. The consultation runs until 1 May and aims to ensure that any future action is well-informed and proportionate.

The government has also committed to helping businesses navigate the situation, offering guidance through its trade support services and encouraging firms to share their concerns. Reynolds noted that many UK companies still see strong opportunities in US-UK trade and want to preserve access to the world’s largest economy.

He ended by affirming the government’s wider strategy to promote economic resilience through industrial growth, international cooperation, and fair trading practices. The message from the Department for Business and Trade is that while the tariffs are unwelcome, the UK remains focused on protecting its interests without resorting to knee-jerk reactions.

In short, the UK is taking a pragmatic, level-headed approach — defending its industries, listening to businesses, and working to keep trade channels open, even in challenging circumstances.