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1. Background to the Horizon Shortfall Scheme (HSS)

The Horizon Shortfall Scheme (HSS) was put in place by Post Office Ltd to compensate postmasters who were not convicted, to help cover the personal financial loss caused by the system. The original HSS compensation payments were not exempt from Income Tax and National Insurance contributions. Postmasters who received HSS compensation may be liable to pay Income Tax and National Insurance contributions, so will have to file a Self Assessment tax return.

The top-up payments announced in June 2023 are exempt from tax. These extra payments are to compensate postmasters for any undue reductions to the amount of compensation caused by the tax treatment of the scheme.

HMRC is providing ongoing support to postmasters to file their tax return and pay any Income Tax and National Insurance contributions due. HSS聽postmasters can use the following information聽for guidance and contact our dedicated support team for help.

1.1 Other Horizon compensation schemes

Payments in the Horizon Convictions Redress Scheme, Overturned Conviction (formerly known as Overturned Historical Conviction) and Group Litigation Order schemes were made exempt of Income Tax and National Insurance contributions and recipients do not have to pay any tax on these payments or report them to HMRC. 聽

2. Guidance for postmasters in the Horizon Shortfall Scheme (HSS)

If you received compensation under the聽HSS between 6 April 2022 and 5 April 2023 or 6 April 2023 and 5 April 2024, you need to file a Self Assessment tax return and pay Income Tax and National Insurance contributions.

HMRC recognise that some postmasters have not yet received top-up payments from Post Office Ltd and were unable to file their Self Assessment tax return before the 31 January deadline.

Postmasters who did not receive top-up payments in time will not have to pay any late filing or late payment penalty or interest.

The dedicated helpline is available for any postmasters who need support.

2.1 Filing your Self Assessment tax return

If you鈥檝e received a notice to file a Self Assessment tax return, the deadline to submit and pay your tax bill is 31 January after the end of the tax year (5 April) it applies to.

You need to send a return and declare your taxable income even if you have not received your top-up payment from Post Office Ltd. We will not charge any interest or penalties for sending your return or paying your tax late as a result. If you need help filing your return, contact our dedicated support team.

If you鈥檝e not been asked to file a Self Assessment tax return by 31 January, contact our dedicated support team for further advice and support.

3. Getting help

HMRC has taken steps to identify affected postmasters and aims to prevent any penalty notices being issued or interest being charged. If you do receive a penalty notice or interest charge, contact our dedicated support team on 0300 322 9625 and we will remove the penalties and interest.聽

Postmasters who are unable to pay their tax liability in full can set up a payment plan to pay in affordable monthly payments. Payment plans are flexible and based on individual income and expenditure. Anyone who is worried about paying their tax liabilities, or about their National Insurance credits record, should contact our dedicated support team to discuss their options.聽

Post Office Ltd provide funding of up to 拢1,200 including VAT for independent tax advice. This is to help you complete your tax return for the tax years you received your HSS compensation payment.

3.1 Horizon data and Self Assessment

HMRC has not received or used bulk Horizon data from the Post Office to calculate tax or select returns for further checks. We鈥檙e not aware of any cases where we have relied upon Horizon data.

We recognise that postmasters may have used Horizon data in their Self Assessment tax returns.

If you think you have paid the wrong tax because of Horizon data, contact our dedicated support team.

4. Contact our dedicated support team

Telephone: 0300 322 9625

Opening hours are Monday to Friday, 8am to 6pm.