On Apr. 4, 2025, UK HMRC published a tax information and impact note on ensuring payments made under Horizon Shortfall Scheme (HSS) Appeals are exempt from tax.
The Horizon Shortfall Scheme Appeals (Tax Exemptions and Relief) Regulations 2025 (StIn 2025/434) issued on Apr. 3, 2025, come into force on Apr. 28, 2025.
This measure was announced in a new written ministerial statement on Mar. 13, 2025.
This measure ensures that any compensation payments made to postmasters under the Horizon Shortfall Scheme Appeals process are fully exempt from Income Tax, from National Insurance contributions, as well as Capital Gains Tax, and Corporation Tax.
Statutory Instrument also relieves HSS Appeals process payments of Inheritance Tax.
The terms of the new measure, relating to HSS Appeals will have effect Apr. 28, 2025.
On Sep. 9, UK GVT announced new appeals system for postmasters.
UK GVT announced a new independent appeals process for postmasters in the Horizon Shortfall Scheme; aimed at helping postmasters affected by the Horizon IT scandal.
Follows UKP May 2024 said Horizon system act received royal assent, see #204527.
Also follows UK GVT Dec. 2023 announced scheme for postmasters fees, see #155845.
New Appeals Process
Postmasters who feel their financial settlement did not reflect the true extent of their losses and trauma will be able to apply for the new independent process.
The Horizon Shortfall Scheme is managed by Post Office Limited and funded by the UK GVT, which maintains ultimate oversight of the scheme.
To date, 2,280 individuals have reached an agreement with the Post Office to settle their claim under the Horizon Shortfall Scheme, with £144m in compensation paid out.
The independent Advisory Board raised concerns that, when the Horizon Shortfall Scheme opened in 2020, some claimants were unable to set out their claim in full.
This new appeals process will provide postmasters with the opportunity to have their claim re-assessed with the benefit of new or additional information they can provide.
UK GVT will establish this process as quickly as possible and will provide further updates on eligibility and how to apply when the scheme is launched.
Horizon Shortfall Scheme is available for postmasters who were not convicted, or part of legal action against Post Office, but who still suffered considerably due to failures.
These postmasters have the option to receive a fixed sum payment of £75,000 or choose a full claim assessment route if they believe their losses exceed that amount.
Mar. 2025 Tax Exemption
On Mar. 13, 2025, UK Treasury confirmed tax exemption for Horizon Shortfall Scheme appeals process: no income tax, Capital Gains Tax, National Insurance contributions, corporation tax, or inheritance tax will be payable on compensation received through the process.
UK GVT will legislate via secondary legislation to formalize this tax exemption shortly.
Apr. 2025 Tax Exemptions and Relief
On Apr. 4, 2025, UK HMRC published a tax information and impact note on ensuring payments made under Horizon Shortfall Scheme (HSS) Appeals are exempt from tax.
The Horizon Shortfall Scheme Appeals (Tax Exemptions and Relief) Regulations 2025 (StIn 2025/434) issued on Apr. 3, 2025, come into force on Apr. 28, 2025.
This measure was announced in a new written ministerial statement on Mar. 13, 2025.
This measure ensures that any compensation payments made to postmasters under the Horizon Shortfall Scheme Appeals process are fully exempt from Income Tax, from National Insurance contributions, as well as Capital Gains Tax, and Corporation Tax.
Statutory Instrument also relieves HSS Appeals process payments of Inheritance Tax.
The terms of the new measure, relating to HSS Appeals will have effect Apr. 28, 2025.
