UK watchdog to rule on £246M Post Office subsidy over Horizon scandal and IR35
Summary
Author style: Punchy — this matters. The Competition and Markets Authority’s Subsidy Advice Unit (SAU) will decide within 30 days whether to approve a requested £246 million subsidy to Post Office Ltd. The Department for Business and Trade wants to fund two main costs: continued redress and inquiry activity arising from the Horizon IT scandal (£141.8m) and a separate £104.4m payment to cover an IR35-related tax liability. Together the sums equal roughly 28% of the Post Office’s 2025 annual revenue, and include up to £37.4m earmarked for compensation work in 2026/27.
The article summarises the background: Horizon is the EPOS and back-end finance system whose errors led to wrongful prosecutions of hundreds of subpostmasters between 1999 and 2015. A statutory inquiry launched in 2021 is ongoing and the government passed the Post Office (Horizon System) Offences Act 2024 to overturn convictions. Separately, the IR35 tax rules — aimed at curbing disguised employment for contractors — have created a large retrospective bill for the Post Office, spotlighting wider public-sector compliance problems.
Key Points
- The DBT has requested a £246m subsidy for the Post Office: £141.8m for Horizon remediation and inquiry costs, and £104.4m for an IR35 tax liability.
- The CMA’s SAU will report on the subsidy request within 30 days of referral.
- The combined amount is around 28% of the Post Office’s 2025 revenue; up to £37.4m is for remediation activity in 2026/27.
- Horizon failures led to roughly 736 wrongful prosecutions from 1999–2015; the public inquiry and compensation schemes are ongoing.
- The IR35 element underlines persistent difficulties across government bodies in applying off-payroll rules and the complexity of contractor tax status assessments.
- Tax advisory voices warn the IR35 bill may be one of the largest liabilities tied to mismanaging the off-payroll rules, raising questions about assessment processes and reliance on HMRC tools.
Why should I read this?
If you care about public accountability, taxpayer risk or you work with (or as) contractors, this is worth a skim. The story ties together a major miscarriage of justice, the cost of fixing it, and a huge tax bill that highlights how messy IR35 enforcement has been in the public sector. In short: big money, big consequences, and potential lessons for anyone who manages contractors or public services.
Source
Source: https://go.theregister.com/feed/www.theregister.com/2026/02/04/post_office_horizon_subsidy/