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Tax exemptions for compensation payments paid by the Post Office for Overturned Historical Convictions

Statement made on 23 September 2022

Statement UIN HCWS303


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 previously announced funding for final settlement compensation payments for postmasters who have had their convictions overturned. So far, the vast majority of postmasters who have had their convictions quashed have each received an interim compensation payment of up to £100,000. The Post Office, supported by Government, is now working towards agreeing final settlements with the claimants who have come forward.

The Government wants to see these postmasters with quashed convictions compensated fairly and swiftly. That is why the Government is announcing today that victims will pay no income tax, capital gains tax, National Insurance contributions, inheritance tax or VAT on compensation payments for Overturned Historical Convictions, including on payments already made. The Government will legislate to exempt these payments in due course where necessary.

HM Revenue and Customs will not collect any tax that may have been due on payments made already up to the date the legislation takes overriding effect.

With the Government being the sole share 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.

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