[UK] £104m taxpayer bailout to cover Post Office’s historic IR35 breach

The UK government has confirmed that Post Office Limited will receive more than £104 million in taxpayer support after being hit with a substantial bill for historic IR35 non-compliance, Business Matters reports.

A newly published government document states that the Department for Business and Trade will provide up to £104,441,881 to cover the Post Office’s outstanding tax liability to HMRC. 

Officials concluded that the Post Office is “not in a position to fund it” itself. The funding will be paid directly to HMRC.

The document reportedly confirms that the support is related to the Post Office’s historic handling of contractors under off-payroll working rules, together with other legacy issues, including those linked to the Horizon IT system.

The scale of the liability has significantly grown. In its 2023/24 annual report, the Post Office made a £72 million provision following an HMRC review into how it had classified contractors and freelancers. That provision increased to £101 million in its 2024/25 accounts. The Post Office stated it expected the matter to be settled during the 2025/26 financial year.

In recent years, several major public sector bodies - including Defra, the Ministry of Justice, the Home Office and the Department for Work and Pensions - have disclosed liabilities connected to IR356 non-compliance; their combined totals exceed £200 million.

Source: Business Matters

The UK government has confirmed that Post Office Limited will receive more than £104 million in taxpayer support after being hit with a substantial bill for historic IR35 non-compliance, Business Matters reports.

A newly published government document states that the Department for Business and Trade will provide up to £104,441,881 to cover the Post Office’s outstanding tax liability to HMRC. 

Officials concluded that the Post Office is “not in a position to fund it” itself. The funding will be paid directly to HMRC.

The document reportedly confirms that the support is related to the Post Office’s historic handling of contractors under off-payroll working rules, together with other legacy issues, including those linked to the Horizon IT system.

The scale of the liability has significantly grown. In its 2023/24 annual report, the Post Office made a £72 million provision following an HMRC review into how it had classified contractors and freelancers. That provision increased to £101 million in its 2024/25 accounts. The Post Office stated it expected the matter to be settled during the 2025/26 financial year.

In recent years, several major public sector bodies - including Defra, the Ministry of Justice, the Home Office and the Department for Work and Pensions - have disclosed liabilities connected to IR356 non-compliance; their combined totals exceed £200 million.

Source: Business Matters