Screenshot of a MailOnline news article published on 16 February 2023: MailOnline Home News Royals U.S. Sport TV&Showbiz Femail Health Science Money Tra Breaking News Australia Video University Guide China Debate Meghan Markle Prince Harry King C 'I lost my post office, house and marriage - now I've been shafted twice': Postmaster who lost out in Horizon IT scandal now forced to hand back £322k compensation • Francis Duff, 80, suffered a divorce and lost his home in the Post Office scandal • He's now been told he'll be forced to hand £322,000 compensation back By TOM WITHEROW, SENIOR POLITICAL CORRESPONDENT FOR THE DAILY MAIL PUBLISHED: 15:57 BST, 16 February 2023 | UPDATED: 15:59 BST, 16 February 2023 Share 84 shares 221 View comments

The Post Office’s top priority is covering-up its mistakes

Post Office
4 April 2024

13 Comments

The Post Office’s incompetent compensation process left thousands of postmasters with large tax liabilities. When we revealed this, the Government forced the Post Office to fix the situation – but the Post Office did so far too slowly. New Freedom of Information Act disclosures reveal that, when we identified this new problem, the Post Office’s only concern was the PR impact. And the Post Office continues to cover-up the reasons for its failures.

The Post Office scandal has had three separate phases, with three separate scandals. First, from 1999 to 2015, persecuting and prosecuting postmasters for “shortfalls” which it knew were caused by bugs in its Horizon system, and withholding evidence which would have demonstrated their innocence. Second, from 2017 to 2021, aggressively and improperly litigating to cover-up its failures, when it knew a core plank of its defence was a lie. Third, from 2021, designing and running compensation schemes to ensure it paid its victims as little as possible.

The Post Office says that it’s changed and is now dedicated to righting the wrongs of the past. But the evidence shows that it continues to prioritise covering-up its misdeeds over doing the right thing.

The incompetence

One small scandal within the compensation scandal was that, when the Post Office designed its HSS compensation scheme, it gave no thought to the tax position of the postmasters. The result was that many saw almost half of their compensation lost to tax. Any competent tax adviser would have identified this issue and suggested solutions; the Post Office either didn’t obtain proper advice, or ignored it. It was incompetent.

When we identified the issue, the Government intervened and, in June 2023, required the Post Office to make “top-up” payments to postmasters to cover their tax liability, and provide them with a letter explaining their tax position. It then changed the law to ensure the “top-up” payments would not themselves be taxable. Everything had been done to fix the Post Office’s mess, and all that the Post Office had to do was run the calculations and get the letters out.

So it was incomprehensible that, by the end of 2023, with the self assessment deadline looming, the Post Office had only made a fraction of the top-up payments. 1,100 postmasters hadn’t received a letter or top-up payment, and were left with a £10k tax bill they’d have to pay without any help or assistance.

This should not have been a difficult task. The Post Office knew what the HSS compensation payments were, and what years they covered. So calculating the amount of the top-up payment should have been a spreadsheet exercise. I’ve spoken to accountants familiar with this kind of exercise (from other compensation schemes), and they think a small team could have calculated the appropriate top-ups in a few weeks.

However the Post Office was unable to do this after six months. More incompetence.

The sole focus was on the PR

How did Nick Read, the Post Office CEO, react when we reported that the Post Office had incompetently left 1,200 postmasters with a serious tax problem? Did he demand an explanation for this from his team? Did he ensure a solution was prioritised?

Thanks to a Freedom of Information Act application from Christopher Head, we know the answer to these questions.

There is no sign of Read being surprised by the Post Office’s slow response, much less being disturbed by it. Instead, the sole focus of Read and his team was on the public relations impact. Apparently my twitter thread identifying the issue wasn’t very “helpful”:

Email from Nick Read, Post Office Group CEO, dated 20 December 2023: From: Nick Read [redacted]@postoffice.co.uk> Sent: 20 December 2023 15:45 To: [redacted]@postoffice.co.uk> Cc: [redacted]@postoffice.co.uk>; [redacted] [redacted]@postoffice.co.uk>; [redacted]@postoffice.co.uk>; Post Office Ltd <PostOfficeLtd@tbcardew.com> Subject: RE: Dan Neidle Twitter thread on HSS tax top-ups Hmm....not a helpful thread. Nick Read Group CEO

The team’s subsequent response showed no attempt to understand, or even recognise, the actual criticism: that the Post Office’s response was unjustifiably slow, and had – completely unnecessarily – left 1,100 postmasters in a difficult position:

Internal Post Office email dated 20 December 2023 regarding Dan Neidle's Twitter thread on HSS tax top-ups: From: [redacted]@postoffice.co.uk> Sent: Wednesday, December 20, 2023 4:33 pm To: [redacted]@postoffice.co.uk>; [redacted]@postoffice.co.uk> Subject: RE: Dan Neidle Twitter thread on HSS tax top-ups Hi – agree entirely, was going to say something similar and was just speaking to [redacted] to say whilst [redacted] will agree with Nick – not sure what else we can say as it’s not within our control, Dan Neidle was always going to focus on the negative – as opposed to recognising that we agreed to do the tax tops up, and cover the cost of a tax return. Thanks

I don’t know if this is because they didn’t understand the issue, or were shielding Read from it. Either way, this looks like a dysfunctional management team.

And so, in the end, Read thought it was all okay, because there wasn’t much media pickup of the story:

Email from Nick Read dated 22 December 2023: From: Nick Read <[redacted]@postoffice.co.uk> Sent: 22 December 2023 16:48 To: [redacted]@postoffice.co.uk> Cc: Ben Foat [redacted]@postoffice.co.uk>; Richard Taylor [redacted]@postoffice.co.uk>; [redacted]@postoffice.co.uk>; [redacted]@tbcardew.com>; [redacted]@tbcardew.com>; Post Office Ltd [redacted]@tbcardew.com>; [redacted]@postoffice.co.uk>; Kathryn Sherratt [redacted]@postoffice.co.uk> Subject: RE: Media update - 22 December - Telegraph and tax top-ups Thank you [redacted]. Good job. I think we can be pretty pleased from a media perspective how this week has played out. Well done. Thanks, Nick Nick Read Group CEO

Read had zero interest in the fundamental question: how come the Post Office had left 1,100 postmasters hanging?

The full set of documents is here.

The cover-up

I tried to establish how the Post Office had got this so wrong, and failed to achieve in six months what a competent team of accountants would have achieved in a few weeks. The obvious answer is that they didn’t have enough staff engaged on the task – so I filed a Freedom of Information Act request asking how many staff had been involved.

The Post Office is refusing to tell me:

Excerpt from a Freedom of Information response from the Post Office regarding the Tax Top-Up project: We confirm that Post Office does hold the information on the fulltime equivalent (“FTE”) number of staff working on the Tax Top-Up project (which has been ongoing since it went live in late October 2023), but we have decided that the information should be withheld under sections 40(2) and 40(3A) of the FOIA as the information constitutes personal data relating to other persons. These sections exempt personal information from disclosure if that information relates to someone other than the applicant, and if disclosure of that information would breach any of the data protection principles in Article 5(1) of the UK General Data Protection Regulation (GDPR). We consider that disclosure of this information is likely to breach the first data protection principle, which provides that personal data must be processed lawfully, fairly, and in a transparent manner. Disclosure of the fulltime equivalent number of the individuals calculating tax top-up payments would not constitute 'fair' processing of their personal data because the number is less than 10 and disclosure of the actual number could lead to an identification of the individuals involved. They would not reasonably expect their role and number to be disclosed in relation to this request for information.

Needless to say, the idea that telling me the number of staff involved in a project would enable those staff to be identified is daft. It’s a cover-up, and not a very good one. (You can see the Post Office’s complete response here.)

I asked for a review of this decision immediately, on 21 February. The Post Office should have responded within 20 business days. They haven’t responded at all, not even to acknowledge receipt.

The Post Office hasn’t changed. Its only interest is in preserving the little that’s left of its own reputation.

Footnotes

  1. A few would have been trickier, for example where the postmaster operated their business through a partnership or company; but reasonable simplifying assumptions could have been made. ↩︎

Further reading

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Letter to Mr Read from members of an advisory board regarding Post Office compensation settlements: Dear Mr Read Thank you for your response. I am afraid that (as qualified lawyers, some of us with extensive experience of practice) my colleagues on the Advisory Board and I remain deeply unconvinced by the substance of what you say on the legal issues. However, since the matter is now in the hands of the SRA ,we will refrain from commenting for the moment, save to say one thing. We continue to hear stories that your former sub-PostMasters and Mistresses are confused, intimidated and hurt by the behaviour of the Post Office and its lawyers in negotiating settlements generally and in continued use of legalistic terminology. This is especially true for the significant number who remain deeply traumatised, and who do not understand the practice of terminology of what they see as an aggressive approach to settling claims. This is irrespective of whether the language or behaviour may or may not be technically permissible, and irrespective of the fact that they may have legal representation. Your reliance on legal argument ... and legal terminology similarly does not impress us. We do not perceive demonstration of behaviour that is anything like a sympathetic understanding towards the people your organisation has harmed. We suggest that this should give you cause for deep concern. It is our practice to publish our correspondence, so will ask DBT to arrange this forthwith, unless we hear from you on that point. [illegible]

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Aside from the labelling of nil offers which we accept was inappropriate, and without waiving privilege in their advice, our legal advisers confirmed that…
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13 responses to “The Post Office’s top priority is covering-up its mistakes”

  1. Albert Wright avatar
    Albert Wright

    Well done Dan.

    The fact that the PO say in their letter to you that the number involved in the project was “….less than 10.” supports your suggestion that they did not have enough people on the project.

    Reply
  2. Richard Yates avatar
    Richard Yates

    Yet again, great work, and I agree with Rebecca, I think I could do the work in a few days. I’m not sure why you redacted the email addresses, they deserve every angry email they get

    Reply
  3. .I've McLurg avatar
    .I’ve McLurg

    I’m not involved with the PO in any way, but their determination to elongate every procedure, without thought to the victims, borders on illegality and certainly is immoral.
    A thousand thanks to you,Dan, for your determination action to see justice served for the victims.

    Reply
  4. Dr Robert Dyer avatar
    Dr Robert Dyer

    It’s like peeling back the layers of an onion, the deceit, obfusfaction and lying from those at the top of the PO management chain and down through the ranks. Thank goodness we have Dan doing this work. Please keep going Dan. You are doing a great service to the public

    Reply
  5. Rebecca Benneyworth avatar
    Rebecca Benneyworth

    And to be honest, I could have done the calculations in a few days if I had been given the data on HSS payments. And that would include issuing the ‘offer letters’ – which would have included how to report and pay the tax.

    Reply
  6. Rebecca Benneyworth avatar
    Rebecca Benneyworth

    And even when they did issue top up payments, the letter was so complex and impenetrable that those who received them thought they were a tax demand, not an offer of further money. Postmasters had to ‘accept’ the offer before the funds were made available and some were very reluctant until we (my band of volunteers) intervened.

    Reply
  7. Fay Chilcott avatar
    Fay Chilcott

    Superb coverage, as always, by Dan Neidle.

    Reply
  8. Martin Corrall avatar
    Martin Corrall

    Dan – thank you so much for your clear, coherent and trenchant observations of this ghastly mess. Strength to your arm.

    Reply
  9. Simon Neil Mitchell avatar
    Simon Neil Mitchell

    Sir Wyn Williams who is heading the PO enquiry should be made aware of this Dan.

    I think he was wide boundaries in this matter so he should be informed.

    Have you considered a press release of your correspondence with the PO and a full report?

    I think they would be very interested in this.

    Good work Dan, always a plesure.

    Reply
  10. Alan Grahame avatar
    Alan Grahame

    The Secretary of State with ultimate responsibility for the Post Office is Kemi Badenoch. This needs to be brought to her attention and an answer should be demanded within 5 working days. If she can find time to fire Staunton – albeit after the press was briefed – and then defend her decision, then she should have time to address an issue that further harms the welfare of sub postmasters.

    Reply
  11. Stephen Reynolds avatar
    Stephen Reynolds

    The PO has no shred of good reputation left. All now know how a deliberate and prolonged campaign of lying and obfuscation was entered into at the most senior level. All those who are now proven to have known and supported this campaign, past and present, must now be brought to justice. That includes POL senior management, Fujitsu, legal council, and not least the government who ignored what was happening.

    Reply
  12. PAUL NIXON avatar
    PAUL NIXON

    The attitude of the Post Office remains shockingly callous, with little regard for the people it has incorrectly persecuted.

    As you say, their focus is on their own reputation. They do not seem to realise that they have no reputation left.

    Some organisations are so poor, so dysfunctional, that they reach a point where the only solution left to address their failings is to destroy the organisation and build something new and better in its place. I think the Post Office has reached that point.

    Reply
    1. Gareth avatar
      Gareth

      It is clearly a bureaucratic monster that is hiding behind the post office enquiry . Good work Dan as clearly was a flawed from a tax perspective. What also struck me is how little compassion the PO management have for the victims. This lack of compassion needs addressed and no way can the Post Office remain as is. They can change the top positions if the like but the culture is flawed.

      Reply

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