Postmasters in the Horizon Shortfall Scheme (HSS) who do not receive top-up payments in time to file their tax return will not have to pay late filing or late payment penalties, and interest
HMRC has confirmed that penalties will be waived for postmasters due to delays in receiving top-up payments before the 31 January self assessment deadline.
In addition, it has set up a dedicated team to provide postmasters with any support required. The team can be contacted on 0300 322 9625 from 8am to 6pm Monday to Friday.
The design of the original HSS compensation scheme meant that HSS compensation payments were subject to income tax and national insurance contributions (NICs).
On 19 June 2023 the government announced that postmasters in the HSS will receive top-up payments to ensure that the amount of compensation they receive is not unduly reduced by tax. Postmasters in the HSS will also receive £300 to pay for independent advice on filing their tax return. Not all top-up payments and tax advice grants have yet been made by the Post Office.
HMRC is committed to supporting HSS postmasters to file their tax return and pay any tax and NICs due.
Any postmasters who received HSS compensation payments between 6 April 2022 and 5 April 2023 and have not yet been asked by HMRC to file a self assessment tax return by 31 January 2024 should speak to the HMRC dedicated support team to find out their next steps.
‘HMRC has taken steps to identify those receiving relevant HSS payments and will aim to prevent any penalty notices being issued or interest being charged,’ the HMRC guidance stated. ‘However, if you do receive a penalty notice or interest charge, you can speak to our dedicated support team on 0300 322 9625 and we will remove the penalties and interest.’
Payments in the Overturned Conviction (formerly known as the Overturned Historical Conviction scheme) and Group Litigation Order schemes were made exempt of income tax and NICs and recipients do not have to pay any tax on these payments or report them to HMRC.
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