Post Office 'could face £100m bill and insolvency' over Horizon compensation tax relief

The Post Office may very well be dealing with a £100m invoice and insolvency after claiming tax reduction for its compensation funds to sub-postmasters, a tax professional has claimed.

Dan Neidle, the top of non-profit organisation Tax Policy Associates, mentioned the Post Office claimed £934m tax reduction for its compensation funds, and recommended it may very well be “unlawful”.

The Horizon scandal noticed greater than 700 sub-postmasters and sub-postmistresses handed legal convictions after defective Fujitsu accounting software program made it seem as if cash was lacking at their branches.

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Mr Neidle posted on X saying: “The Post Office claimed £934m tax reduction for its compensation funds to the postmasters it persecuted. That’s outrageous. It’s additionally illegal – so the Post Office now faces an surprising £100m tax invoice. It could also be bancrupt.

“Our team of eminent tax and accounting experts reviewed the Post Office’s accounts for the last ten years in detail and one issue stood out: it has treated the compensation it pays to postmasters as tax deductible. That is not correct.

“A supply on the Post Office has confirmed to us that HMRC is investigating this and asserting that the Post Office owes tax – in our view they’re proper to take action.”

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HMRC wouldn’t affirm or deny investigations and mentioned it might not touch upon identifiable taxpayers.

A Post Office spokesperson mentioned: “The disclosed information on taxation in Post Office’s Annual Report and Accounts for 2022/23, published on 20 December 2023, is appropriate and accurate.

“We have common conversations with authorities who’re our sole shareholder and our correspondence in respect of this difficulty was about making certain that the tax remedy of funding we obtain from authorities to pay compensation was handled in the identical method as different authorities funding that we obtain.”

Days after the ITV drama Mr Bates vs The Post Office aired, Prime Minister Rishi Sunak introduced that the wrongly prosecuted in England and Wales may have their names cleared by the tip of the 12 months beneath blanket laws to be launched inside weeks.