Publish proposals for equal tax treatment of compensation payments
DBT shall publish within 28 days of the publication of this report its proposals for ensuring that applicants to all schemes are treated equally and fairly in respect of liability to Income Tax, Capital Gains Tax, and Inheritance Tax on compensation payments.
- The Post Office Horizon Compensation and Infected Blood Interim Compensation Payment Schemes (Tax Exemptions and Relief) Regulations 2023 (SI 2023/184) provided the statutory basis for tax exemptions (SI 2023/184, 2023).
- The Post Office Horizon Shortfall Scheme and Group Litigation Order Compensation Payments (Inheritance Tax Relief) Regulations 2023 (SI 2023/1009) provided Inheritance Tax relief for compensation payments (SI 2023/1009, 2023).
How was this evidence gathered?
Response
Accepted
Response
AcceptedAccepted. Payments under the GLO scheme and the compensation for overturned convictions (OC) are exempt from IT, National Insurance contributions (NICs) and CGT. On 19 June, the government announced arrangements for ensuring fair treatment in respect of IT, NICs and CGT for Horizon Shortfall Scheme (HSS) claimants. Initial offers under HSS did not account for the tax on compensation when paid as a lump sum, which means that postmasters were not necessarily restored to the position they would otherwise have been in. Top-up payments are the quickest and most efficient way to address this issue and will be exempt from tax. Payments from all 3 schemes are exempt from IHT. (Source: DBT Response to Post Office Horizon IT Inquiry First Interim Report, September 2023)
Progress Timeline
Government response: Accepted. Department for Business and Trade accepts this recommendation. Payments under the GLO scheme and overturned convictions are exempt from Income Tax, National Insurance contributions, and Capital Gains ...
Published Evidence
Published assessments of progress from inspectorates, select committees, official progress reports, and other sources. Source type badge indicates whether each assessment is independent or government self-reported.
Compensation payments under the GLO scheme and for quashed convictions were exempted from Income Tax, National Insurance and Capital Gains Tax, fulfilling the requirement in this recommendation.