RLIT0000624 -UK Parliament - Post Office Compensation Update statement made on Tuesday 19 June 2023
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Post Office Compensation Update
Statement made on 19 June 2023
Statement UIN HCWS860
Statement made by
Kevin Hollinrake >
Minister for Enterprise, Markets and Small Business
Conservative
Thirsk and Malton:
Commons
Statement
The Government is determined that postmasters affected by the Horizon IT Scandal receive the compensation that they deserve. The
Historical Shortfall Scheme has made good progress in achieving this outcome with over 99% of original claimants receiving an offer
to date.
However, the tax treatment of awards has in some cases had the effect of unfairly reducing the net compensation received by
postmasters. In particular, the problem that has arisen on the Historical Shortfall Scheme is that awards for loss of earnings are paid
as a lump sum through compensation but if the postmaster had stayed in employment and received that income over several tax
years, they may have faced a lower tax bill.
The Government is today announcing that it will support the Post Office with an estimated £26m of funding to make additional
payments to postmasters in the Historical Shortfall Scheme to ensure that compensation is not unduly lost to tax.
Every postmaster involved in the scheme will benefit from these additional payments. To avoid further complexity, the Government
intends to legislate to make these additional payments exempt from Income Tax, Capital Gains Tax and National insurance
contributions.
So that payments can be made as swiftly as possible, the top-ups will be calculated so that no postmaster pays more than the basic
rate of tax on the taxable elements of their compensation. This approach ensures that postmasters do not need to provide any
further information.
Additionally, all claimants involved in the scheme will be able to access funding for tax advice of up to £300 to support them in filling
out their tax returns.
Statement from
Department for Business and Trade a
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This statement has also been made in the House of Lords
Department for Business and Trade >
Post Office Compensation Update
The Earl of Minto
Minister of State, Department for Business and Trade
Conservative, Excepted Hereditary
Statement made 19 June 2023
HLWs845
Lords
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