Tax Exemptions: Grenfell Support Scheme and Horizon Convictions Redress Scheme

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.

His Majesty’s Revenue and Customs 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 are 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.

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