Post Office may face £100m tax bill over victim payouts - experts

The Post Office may have underpaid more than £100m in tax while overpaying its senior executives, according to tax experts. Dan Neidle of Tax Policy Associates says the Post Office paid less tax by deducting payments to victims of the Horizon scandal from its profits. However as the Post Office is owned by the government, exacting financial penalties is tantamount to the government fining itself and no-one is suggesting the Post Office will cease to function. In this instance, the Post Office allegedly deducted the payments made to victims of the Horizon IT scandal from their revenue, resulting in a lower profit and therefore a lower tax bill. "The payments of compensation by the Post Office are almost certainly not deductible for corporation tax purposes, in my view. Not only is it difficult to argue that they were incurred for trading purposes, there is also a general rule of public policy that fines - or payments in the nature of fines - are not deductible."

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