Compensation payments made to those affected by the Post Office Horizon scandal are covered by a number of specific exemptions, but some receipts are taxable.
Overview of Post Office Horizon compensation
Thousands of sub-postmasters were incorrectly prosecuted, where undue reliance was placed on the Post Office's Horizon accounting system. Others paid for errors made by the Post Office Horizon accounting software, or suffered other detriment.
The Government has introduced a number of provisions to exempt compensation payment in respect of this scandal, and the Treasury may make additional regulations, if required26.
The provisions made do not cover every payment, and some payments are taxable. The scope of the exemptions is considered below.
An easement applies in respect of 2022/23 self-assessment tax late filing penalties, see A4.552. For capital gains tax treatment, see C3.1808. For inheritance tax treatment see I4.129A. For corporation tax treatment, see D1.369B. For taxation of income for sub-postmasters generally, see E4.238.
For interaction with £30,000 exemption on termination of employment, see E4.802BB.
Background to Post Office Horizon compensation
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Web page updated on 17 Mar 2025 17:25