Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential merits of ensuring that the Horizon compensation scheme is tax free.

The Government is working with the Post Office to ensure all victims of the Horizon IT Scandal receive full and fair financial redress.

The Government has already granted tax exemptions for payments related to the Overturned Convictions (OC) and Group Litigation Order (GLO) compensation schemes.

Compensation payments for the Horizon Shortfall Scheme (HSS) are subject to tax. However, to ensure postmasters get the full financial redress they deserve, the Government announced on 19 June 2023 a tax-exempt top-up payment for HSS postmasters to ensure that the underlying amount they receive is not unduly reduced by tax. Elements specifically for the shortfalls that were repaid, or distress that was caused, are not taxable