Exchequer Secretary (): The Government will
legislate to ensure that payments made under the Grenfell Support
(Restorative Justice) programme are exempt from Income Tax. This
legislation will apply retrospectively from 5 June 2024, when
payments from the scheme started.
HMRC will exercise its collection and management discretion and
will not collect Income Tax that may have been due on any
payments made from 5 June 2024 to the date the legislation takes
effect.
Exempting these payments from Income Tax means that tax credits
claimants who received a payment up to 5 April 2025 should not
have seen a reduction in their tax credits award. While no tax
credits awards would have been reduced automatically, claimants
who reported this payment to HMRC as part of their income for tax
credits purposes can contact HMRC to determine whether their tax
credits award was correct. HMRC is exploring options to
proactively contact those tax credit customers who have received
any payments under the Grenfell Support (Restorative Justice)
programme.
The Government will also legislate to exempt compensation
payments in the expanded Horizon Convictions Redress Scheme. This
was expanded on 3 June 2025 to include postmasters with
convictions overturned by a Court, postmasters who were
prosecuted for alleged offences committed while the Horizon
system was in use but did not face criminal convictions, and
postmasters who received a caution, or in Scotland received an
alternative to prosecution or a purported alternative to
prosecution from the Post Office, for an alleged offence
involving the Horizon system.
The Government is committed to maintaining the tax treatment of
the Horizon Convictions Redress Scheme. Therefore, the Government
will legislate to formalise the tax exemption and ensure that no
Income Tax, National Insurance contributions, Capital Gains Tax
or Inheritance Tax will be payable for redress received under
this scheme.
