'Today we begin restoring some of the dignity so cruelly taken away,' said Post Office Minister Blair McDougall as the Government opened the Capture Redress Scheme on Wednesday 29 October. The scheme lets postmasters hit by the Post Office’s 1990s Capture software apply for compensation.

HM Treasury has signed the Post Office Capture Redress Scheme (Tax Exemptions and Relief) Regulations 2025. The instrument was made on 28 October, laid on 29 October, and comes into force on 20 November, but it applies to payments received on or after 27 October. Awards under the scheme are exempt from Income Tax, Capital Gains Tax and, where relevant, Corporation Tax, with relief from Inheritance Tax. It also covers payments to 'nominated individuals' where a former company or partnership has closed, and confirms that relevant onward payments made by companies will be free of Income Tax and Capital Gains Tax. The regulations are signed by Treasury Lords Commissioners Christian Wakeford and Stephen Morgan.

Capture was a faulty accounting system used in Post Office branches between 1992 and 2000. In June, the Department for Business and Trade (DBT) set out the structure, scope and eligibility for a dedicated Capture Redress Scheme after an independent Kroll review found a reasonable likelihood the system caused shortfalls.

From today, eligible postmasters can receive an immediate £10,000 preliminary payment once their eligibility is confirmed, with final awards assessed by an independent panel on a banded scale from £10,000 to £300,000. The Government will test the process with the first 150 cases before wider rollout, and says awards are tax‑exempt and disregarded for means‑tested benefits.

For claimants across the North-from Cumbria and Lancashire to Teesside and West Yorkshire-this removes the fear that redress will trigger fresh tax bills or push families into higher bands. It also means estates won’t be dragged into Inheritance Tax purely because of a payout agreed under this scheme.

DBT says applications are made via GOV.UK. To evidence work at a branch in the 1990s, claimants can ask HMRC for historic tax records using the new Capture Redress form; the guidance explains how to request records back to 1992 and submit them with an application.

Many Northern branches were run as family companies or partnerships. Where those entities have since closed, the regulations allow a former shareholder, director or partner to be named as a 'nominated individual' so compensation can be paid-and treated for tax-just as if the business still existed.

The inheritance tax position is now clear. The relief applies to deaths on or after 27 October 2025, so families of former postmasters who have died recently should speak to their probate adviser once any award is confirmed and keep the DBT award letter with estate papers.

For incorporated branches, the compensation is outside Corporation Tax. If the company passes the money on, those onward payments are also outside Income Tax and Capital Gains Tax. Keep clean records so the award doesn’t end up reported as trading income or a capital receipt by mistake.

Exchequer Secretary Dan Tomlinson told Parliament the Government would legislate so 'no Income Tax, National Insurance, CGT, Corporation Tax or Inheritance Tax will be payable' on Capture redress. This week’s statutory instrument delivers the tax side; National Insurance is usually handled by separate regulations.

Officials say lessons from Horizon have been built in. As of the end of September, ministers say over £1.2bn has been paid to more than 9,000 Horizon victims; the Capture scheme is designed to move faster, with early payments while claims are assessed. For Northern high streets, speed matters more than slogans.

The message is simple: if you worked a branch between 1992 and 2000 and saw unexplained shortfalls, get your paperwork in. The tax question is settled; now the focus is getting money from Whitehall to households that have waited long enough.