Post Office Compensation Update

Thursday 29th June 2023 Written Statements

[The Financial Secretary to the Treasury (Victoria Atkins)]

This House is aware that the Post Office Horizon scandal has had a devastating impact on the lives of many postmasters since it began over 20 years ago. The Government are deeply concerned about ensuring the fair treatment of this group. The tax treatment of payments made under the Horizon shortfall scheme (HSS) and the group litigation order (GLO) scheme is of vital importance to ensure fair compensation, and a key part of this is the consistency of such treatment with other historic compensation schemes, and the principles behind such decisions.

The Government have already announced their decision that payments made under the GLO scheme and payments made to postmasters with overturned convictions will not be liable for income tax and that top-up payments will be made to ensure that the compensation of those on the HSS is not unduly reduced by tax.

Today, we go further to correct the historic injustices by announcing that the Government will not collect any inheritance tax (IHT) that may arise in relation to payments made under the HSS and the GLO scheme to victims of the Post Office Horizon scandal. This brings the IHT treatment of payments made to victims under the HSS and the GLO scheme in line with those made to postmasters with overturned convictions. This exemption recognises the unusual status of the HSS and the GLO scheme, and the egregious nature of the Post Office Horizon scandal.

The Government will legislate to exempt these payments from IHT in due course, but to ensure that recipients have certainty over their tax position prior to legislation being introduced, from today HM Revenue and Customs (HMRC) will not collect any IHT in relation to payments made up to the date the legislation comes into force. Any IHT paid by the personal representatives of estates who did not previously qualify for relief from IHT on HSS and GLO scheme payments will now be entitled to a refund from HMRC.

With the Government being the sole shareholder in the Post Office, we will continue to work across Government and with the Post Office to ensure the postmasters get the full compensation they deserve.

[HCWS896]