Understanding the New Tax Exemptions for Horizon Convictions and Grenfell Support

In an effort to provide clarity and financial relief, the UK government has introduced new regulations exempting certain payments from Income Tax, Capital Gains Tax, and Inheritance Tax. Here's what you need to know about these changes:

Horizon Convictions Redress Scheme (HCRS) Amendments

The Department for Business and Trade (DBT) is expanding the Horizon Convictions Redress Scheme. This scheme is designed to compensate postmasters affected by issues with the Horizon IT system used by the Post Office. The amendments mean:

• Postmasters whose convictions have been overturned by a court.
• Those prosecuted but not convicted for offences linked to the Horizon system.
• Individuals who received a caution related to the system.
• In Scotland, those who received alternatives to prosecution.

These groups will now receive compensation payments that are exempt from Income Tax, Capital Gains Tax, and relieved from Inheritance Tax, retroactively.

This move simplifies the legal and financial landscape for affected postmasters, ensuring they receive compensation without the burden of tax implications.

Grenfell Support (Restorative Justice) Programme

In response to the tragic Grenfell Tower fire in 2017, the Royal Borough of Kensington and Chelsea is administering a support programme. This programme offers financial assistance to the bereaved, survivors, and the local community, including education and training support.

The new regulations exempt these payments from Income Tax, effective retroactively from June 5, 2024. This ensures recipients can focus on recovery and rebuilding without worrying about tax liabilities.

Why Are These Changes Important?

These exemptions are crucial as they provide financial relief and certainty to those affected by the Horizon system and the Grenfell Tower fire. By removing tax liabilities from compensation payments, the government aims to support affected individuals more effectively, acknowledging past hardships and facilitating a smoother path to restitution and recovery.

No Consultation, No Impact on Businesses

Given that these changes are solely beneficial to taxpayers, no formal consultation was held. The legislation primarily impacts individuals rather than businesses or charities, ensuring a direct benefit to those it aims to support.

In sum, these regulatory amendments reflect the government's commitment to addressing historical injustices and supporting communities affected by systemic failures and tragedies.