Legislation was enacted to provide tax exemptions and relief for compensation payments made under the Post Office Capture Redress Scheme, effective from late October 2025.

The Post Office Capture Redress Scheme (Tax Exemptions and Relief) Regulations 2025 implement tax relief measures for compensation payments made under the scheme designed to redress individuals adversely affected by the Post Office's 'Capture system.' These regulations, made by the Treasury under powers from the Finance Act 2020, specifically ensure that compensation payouts are exempt from Income Tax, Capital Gains Tax, and Corporation Tax, and provide relief from Inheritance Tax, applying these exemptions retrospectively to payments received or disposals made from October 27, 2025.

The regulations amended the Horizon Convictions Redress Scheme and exempted Grenfell Support (Restorative Justice) Programme payments from income tax.

These regulations amend the Horizon Convictions Redress Scheme to expand its eligibility criteria for compensation, encompassing convictions quashed by courts or legislation, cautions, and alternative-to-prosecution outcomes related to the Horizon system.

The amendments also provide income tax exemptions for payments made under the Grenfell Support (Restorative Justice) programme to victims of the Grenfell Tower fire. Both changes have retrospective application.

The Disability Premium Compensation Scheme (Income Tax Exemption) Regulations 2025 exempted from income tax payments made under a compensation scheme to universal credit claimants for past losses due to previous disability premium ineligibility.

These regulations exempt from income tax payments made under the Department for Work and Pensions' disability premium compensation scheme and its Northern Ireland equivalent.

The exemption retroactively covers payments received on or after December 18, 2024.

This action addresses a court ruling that highlighted unfair treatment of certain universal credit claimants who lost disability premiums when transitioning from legacy benefits.

The regulations established tax exemptions and relief for payments made under the Horizon Shortfall Scheme Appeals, effective from April 28, 2025.

The Horizon Shortfall Scheme Appeals (Tax Exemptions and Relief) Regulations 2025, effective April 28, 2025, grant tax exemptions and relief to recipients of compensation payments from the Department for Business and Trade’s independent appeals process.

The regulations exempt these payments from income tax, capital gains tax, inheritance tax, and corporation tax.

Additionally, it exempts from income and capital gains tax relevant onward payments made by companies relating to these appeal payments.

All exemptions are rooted in the Finance Act 2020.

The regulations exempted Scottish Adult Disability Living Allowance from income tax by amending the Income Tax (Earnings and Pensions) Act 2003.

The Income Tax (Exemption of Scottish Adult Disability Living Allowance) Regulations 2025, effective March 19, 2025, amend the Income Tax (Earnings and Pensions) Act 2003 to fully exempt Scottish Adult Disability Living Allowance from income tax.

This amendment is made under the authority of the Finance Act 2020 and clarifies the tax treatment of this specific benefit.