As part of the Horizon Shortfall Scheme (HSS), postmasters may receive compensation payments during the 2022/23 tax year. These payments may need to be reported on the individual’s self assessment tax return and may be subject to income tax and national insurance contributions.
To ensure that any compensation is not reduced by tax, postmasters may also receive a tax exempt top-up payment from Post Office Ltd. However, many of these top-up payments have not been processed and paid.
HMRC has published guidance for postmasters who have not received their top-up payment in good time to file their 2022/23 tax return, due 31 January 2024. Affected individuals should not be subject to late submission penalties and late payment interest if they file and pay late as a result.
HMRC has tried to identify individuals within HSS so they do not receive penalties and interest. However, if postmasters within HSS do receive a penalty charge or interest charge, they should contact HMRC.
A dedicated HMRC team will deal with enquiries from postmasters in the HSS, including payment options and support for where to report the compensation payments on tax returns. The team can be contacted on 0300 322 9625 from Monday to Friday, 08:00 –18:00.
Postmasters who have received HSS compensation payments within the 2022/23 tax year, but who have not received a notice to file a return, should get in contact with the dedicated HMRC team.
A team of tax experts are also offering free-of-charge practical help and advice to postmasters. They can be contacted at subpostmasterstax.org.uk. Tax professionals can also use the form to volunteer their services.
The Tax Faculty
ICAEW's Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.
More from the Tax Faculty
Stay up to date with the latest developments in tax by signing up to the Tax Faculty's weekly e-newsletter
Comprehensive support for Tax practitioners each month from the Tax Faculty and expert contributors.
Expert advice from the Tax Faculty's technical managers on all the developments in tax policy and practice.