3. Weekly Newsletter
Post Office Scandal
The Post Office faces potential insolvency due to a possible £100 million tax bill following the postmaster’s scandal. The scandal was an almost 20-year period of theft, false accounting and fraud due to the faulty post office’s horizon accounting software. The Post Office has tried to claim tax relief on the compensation it paid to the victims of the scandal.
The latest accounts from the Post Office displayed £435 million in compensation costs to victims who lost money because of the flawed Horizon software. Research also shows that this is not the first time the post office has claimed tax deductions for compensation payments.
The Post Office is threatened with huge financial issues as costs related to penalties or fines are typically not tax deductible. Founder of tax policy associates, Dan Neidle, has stated that if HM Revenue and Customs ruled against the Post Office, it could have underpaid corporation tax by over £100 million and could become insolvent.
The UK’s front page news cycle over the last seven days has covered a wide range of topics. UK watchdog accuses Southwest Water of failing to be honest over drought projections, UK HS2 High-speed railway’s estimated cost soars to £67 billion. In other news, Fujitsu managed to win contracts despite the Post Office scandal. Some of the newspaper headlines from this week were:
- Financial Times- ‘Persimmon sells more homes than expected as mortgage rates ease’
- Financial Times- ‘UK officials tried to block Fujitsu from government contracts in 2010s’
- Financial Times- ‘Burberry issues profit warning on luxury slowdown’
- Financial Times- ‘Dyson loses €176 million EU damages claim’
- The Times- ‘Farmers sound the alarm on food prices as floods hit crops’
- Sunday Telegraph- ‘Recruiter axes hundreds of jobs in UK’s longest hiring slump’
UK increase Ukraine spending
Downing Street has said that Prime Minister Rishi Sunak will announce an increase to £2.5 billion in military aid to Ukraine in 2024. This comes from a UK pledge of an extra £200 million this year, with hundreds of millions expected to be spent on surveillance, long-range strikes, and sea drones. Rishi Sunak and President Zelensky will meet in Kyiv this week to announce this bilateral deal to reinforce the security cooperation between the two nations. This comes as Sunak spoke about Ukraine this week, stating that “we will stand with Ukraine in their darkest hours and the better times to come”.