The Post Office Scandal is one of the most serious miscarriages of justice in British history. The corporatists in charge of the Post Office knowingly falsely accused over 900 subpostmasters of theft, false accounts, and fraud after shortfalls appeared in their branches due to faults within the Horizon system between 1999 and 2015.
Justice has been slow for the victims. At least four have taken their own lives, but thanks to the tireless work of amongst others Alan Bates (former subpostmaster), justice is slowly heaving into view. In 2019, a group of 555 subpostmasters led by Mr Bates won a group action lawsuit against the Post Office in a High Court, which ruled that Horizon contained defects known to, and covered up, by the Post Office. A public inquiry was established in 2020 and the Metropolitan Police is also presently conducting a fraud investigation into the Post Office.
If things weren't looking bad enough, it also appears that the Post Office committed tax fraud on an industrial scale.
Dan Neidle, a tax lawyer and investigative journalist, argues that the Post Office unlawfully claimed £934 million relief for its payouts to victims of the Horizon scandal and could face a £100 million tax bill and consequent insolvency.
The reason for this is the Post Office claimed tax relief for its compensation packages for those it falsely prosecuted. Tax deductions are possible on payments made for the purpose of trade. Compensating people you knowingly falsely accused of theft is not a business expense and, therefore, ineligible for tax deductions. After all, the purpose of a penalty or fine is to punish, so no tax relief is available.
In short, the Post Office should have paid tax on its compensation packages.
We also have the "shortfalls" recovered from the subpostmasters to deal with. Even though no money went missing, the Post Office still forced subpostmasters to cough up the non-existent shortfalls. This money would have been recorded as returned money from theft, but it wasn't returned from theft but was rather, as Neidle described it, a form of windfall on which they should have paid tax but didn't.
The Post Office is not a small business but a multi-billion corporation. No one buys this as a simple mistake. It was a deliberate attempt to evade tax, perpetrated by its senior board of directors.
In a way, it doesn't matter if HMRC fines the Post Office because it would just be money going from one public organisation to another. The amount of money available for public services will not increase by £100 million but stay the same. A public institution fining a publicly owned company in the same country doesn't benefit anyone except those using it to save face.
What would make a difference are fines targeted towards those responsible. Legal changes removing the Post Office's prosecution powers are also needed. It is possible that those responsible for the Post Office Scandal could face prison time, and they deserve it. The maximum sentence for tax fraud is seven years, and this sentence wouldn't include the other criminal activities Post Office executives engaged in.
If those responsible don't face jail time, as many of their victims did, what message does that send? That prison is for the poor who fiddle the system out of a few hundred, not those who steal £100 million? That they should get away scot-free with little more than a bruised ego? It is political cliché that the wealthy take advantage of the system to avoid all manner of consequences, but the amount of public interest in this case generated by the ITV show Mr Bates vs the Post Office may force the government to make an example of Paula Vennells and Angela van Den Bogerd, formerly CEO and top-ranking Post Office executive respectively.
A Labour government under Keir Starmer would be more likely than the Conservatives to do this; the party has been more outspoken than the Tories regarding the billions stolen in dodgy PPE contracts, and Starmer has a history of prosecuting corrupt MPs.
One thing that should be avoided is using the scandal as a political football, with politicians on one side blaming those on the other out of tribalism. This is unhelpful as there is no evidence that any politician knew what the Post Office was doing. All this does is shift the spotlight away from those responsible. When you start blaming the wrong people and allowing the perpetrators off the hook, you allow scandals like this to continue.
What is so worrying about the Post Office's false accounting is it begs the question how many other large corporations commit similar tax evasion scams, whether deliberately or through the sheer incompetence of those at the top.
Image: Sebastiandoe5
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