I listened to that live, i was going to post the same but forgot thanks for posting.
The Post Office Horizon Scandal
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I listened to that live, i was going to post the same but forgot thanks for posting.
Interesting if fraud was suspected in the Post Office perhaps the blaming of the post masters was deliberate as it created a scapegoat for those who thought the system might have exposed any real fraud going on.
As someone that works in IT at a fairly senior level, I can tell you now - with 100% certainty - without a shadow of a doubt - that any and all bugs would have been held in a defect log / risk log populated as a result of significant user testing and the decision to 'go live' would have been with the Post Office.
To do so, they would have had to a) sign off on the known issues b) accept the risk and mitigation of those bugs
This is standard procedure for all new IT systems.
If the customer does not accept those risks, then a commercial decision must be made to either spend more on development or buy out the contract and scrap it. Or more unusually to agree to go live but have financial service credits to cover any losses due to those known issues experienced by the business.
As they went live, the PO must have known the issues and proceeded anyway. We don't know at this time what the commercials are behind the decision or even if there was one. My personal opinion (and backed up with having worked on IT projects for govt agencies) is they are all a) inept b) terrified of reporting issues to the higher political masters and will therefore cover up any issues and blunder on regardless. Add to that the penchant for them to regularly move the goalposts every 5 seconds - don't forget the DWP pulled out of this joint venture at the last minute, it doesn't surprise me it had issues.
The fact that it has become abundantly clear that the PO prosecutions mandated the sub postmasters not declaring horizon faults for a lower charge, or that the investigators refused point blank to look at transactions and transactional code in the system leads me to believe they knew what bugs there were and HAD signed them off, but wanted to cover up their decision to go live and use the system with bugs, by falsely prosecuting the little people.
Typical government agency cover up con-job
As for the remote access piece...well of course the IT supplier has remote access. But if you think any engineer would remote on and just **** about changing stuff for sh1t5 and giggles, you are as deluded as the typical daily wail reader. The decision to make changes will be issued by the post office nbsc desk as part of a service request or operational change and then handed to the IT provider to perform. It would not surprise me one bit if it comes out there was a constant stream of these requests from the PO to correct obvious large scale errors and issues for major accounting errors that would be hard to hide from superiors or the press....but the smaller ones were left with the sub postmasters holding the can
I cannot see how Fujitsu are culpable for this unless it comes out that they purposefully hid the defects for 15 years and paid off every barrister, solicitor and investigator in the PO employ to hide this fact and prosecute the sub postmasters erroneously.
Otherwise if there was an identified issue leading to a 20k accounting shortfall, the PO would just approach the supplier and fine them a service credit, write off the amount and at the end of each financial period, settle up the accounts and if there was a real shortfall, the supplier would be liable
Just think about it for 2 minutes before jumping on the band wagon and braying for Japanese blood.
This is no different to any other government screw up and cover up since ... Well forever
To do so, they would have had to a) sign off on the known issues b) accept the risk and mitigation of those bugs
This is standard procedure for all new IT systems.
If the customer does not accept those risks, then a commercial decision must be made to either spend more on development or buy out the contract and scrap it. Or more unusually to agree to go live but have financial service credits to cover any losses due to those known issues experienced by the business.
As they went live, the PO must have known the issues and proceeded anyway. We don't know at this time what the commercials are behind the decision or even if there was one. My personal opinion (and backed up with having worked on IT projects for govt agencies) is they are all a) inept b) terrified of reporting issues to the higher political masters and will therefore cover up any issues and blunder on regardless. Add to that the penchant for them to regularly move the goalposts every 5 seconds - don't forget the DWP pulled out of this joint venture at the last minute, it doesn't surprise me it had issues.
The fact that it has become abundantly clear that the PO prosecutions mandated the sub postmasters not declaring horizon faults for a lower charge, or that the investigators refused point blank to look at transactions and transactional code in the system leads me to believe they knew what bugs there were and HAD signed them off, but wanted to cover up their decision to go live and use the system with bugs, by falsely prosecuting the little people.
Typical government agency cover up con-job
As for the remote access piece...well of course the IT supplier has remote access. But if you think any engineer would remote on and just **** about changing stuff for sh1t5 and giggles, you are as deluded as the typical daily wail reader. The decision to make changes will be issued by the post office nbsc desk as part of a service request or operational change and then handed to the IT provider to perform. It would not surprise me one bit if it comes out there was a constant stream of these requests from the PO to correct obvious large scale errors and issues for major accounting errors that would be hard to hide from superiors or the press....but the smaller ones were left with the sub postmasters holding the can
I cannot see how Fujitsu are culpable for this unless it comes out that they purposefully hid the defects for 15 years and paid off every barrister, solicitor and investigator in the PO employ to hide this fact and prosecute the sub postmasters erroneously.
Otherwise if there was an identified issue leading to a 20k accounting shortfall, the PO would just approach the supplier and fine them a service credit, write off the amount and at the end of each financial period, settle up the accounts and if there was a real shortfall, the supplier would be liable
Just think about it for 2 minutes before jumping on the band wagon and braying for Japanese blood.
This is no different to any other government screw up and cover up since ... Well forever
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I was using netop in the late 1990's onwards. It was perfect for being able to remotely assist IT issues and access logs at the remote node to see the reality at the coalface. Of course it could also be used to alter files and configurations at the remote node. However these actions themselves would be recorded in the appropriate log file. It would have taken a lot of effort to cover up alterations made at all the remote nodes, that would involve too much effort IMO - they could of course be counting on the customers ignorance to work in their favour.
I have worked with Fujitsu but never for them and my personal experience is they have always been on the level with me. My experiences have been with their hardware, hardware maintenance divisions.
I bought a lot of usff pc's from them.... e.g.
Fujitsu ESPRIMO Q520 MINI PC
when I went to place another order for them they contacted me to say it was going to be a while before more were available because they were 'storing up' order intentions and then once they had enough confirmed orders they'd instruct the factory to build another batch. I reciprocated by informing them I could delay purchase by 6 months but after that I would have to look elsewhere.
Also people I've worked with rated Fujitsu far higher than another company they worked with. The other company would hose the customer for all they could get away with. Fujitsu just wanted to charge a %age profit on the work done. You can't however rule bad apples out at any companies.
The sad fact is out of X employees in a large company, there will be bullies thieves and con artists.
That echoes my experience too, some of the larger it companies are absolutely out for every penny they can, Fujitsu tend to build partnerships and work on a much longer term basis with their customers
100% this. Particularly around the risk that people look for an easy target to blame - in this case a rich foreign company. Yes, Fujitsu should pay whatever contractual penalties are appropriate, but the main problem here is the UK state persecuting hard working innocent people, and we should all be scared of that.
Another day another twist in this sorry tale.
The Post Office may have underpaid more than £100m in tax by deducting payments to victims of the Horizon scandal from its profits, say tax experts.
Claiming tax relief in this way could count as a breach of the law and could mean it is at risk of insolvency, said Dan Neidle, of Tax Policy Associates.
The company also may have overpaid senior executives, he says.
The Post Office said its financial information was "appropriate and accurate".
It has been paying out to sub-postmasters who have had their theft convictions quashed.
Repaying the alleged shortfall to HMRC could render the Post Office technically insolvent and would involve the government stepping in to financially support it.
However as the Post Office is owned by the government, exacting financial penalties is tantamount to the government fining itself and no-one is suggesting the Post Office will cease to function.
Corporation tax is paid to the government by UK companies and foreign companies with UK offices.
It is charged on their profits - the amount of money companies make, minus their costs such as staff and raw materials.
While businesses can claim corporate tax deductions for legitimate business expenses, costs related to penalties or fines are not generally tax deductible.
In this instance, the Post Office allegedly deducted the payments made to victims of the Horizon IT scandal from their revenue, resulting in a lower profit and therefore a lower tax bill.
Mr Neidle said: "The non-deductibility of compensation for unlawful acts is a well-known point."
Heather Self from accounting and advisory firm Blick Rothenberg agreed.
"The payments of compensation by the Post Office are almost certainly not deductible for corporation tax purposes, in my view. Not only is it difficult to argue that they were incurred for trading purposes, there is also a general rule of public policy that fines - or payments in the nature of fines - are not deductible."
The BBC understands that HMRC is investigating the way that the Post Office has accounted for the compensation payments and provisions.
In its most recently published financial accounts, the risk of a significant adverse tax ruling is acknowledged.
Notes to the accounts include the following: "As at the balance sheet date the company was engaged in discussions with HMRC regarding potential taxation liabilities that could arise in relation to past events but for which no liability has currently been recognised". It continues "the Directors recognise that an adverse outcome could be material".
Mr Neidle estimates that deducting postmaster compensation from the Post Office's trading profit would mean that it underpaid more than £100m in corporation tax.
The Post Office does not currently have enough money to pay that bill and would therefore, Mr Neidle argues, be technically insolvent.
A spokesman said that HMRC could not comment on specific business or individuals but said: "We collect the tax due under the law, creating a level playing field for everyone and funding public services." The Post Office said its financial information was "appropriate and accurate" and it was in discussions with HMRC and the Department for Business and Trade, which oversees the state-owned company.
Executive pay
While the Post Office appears to have deducted compensation provisions from their taxable profits, it apparently ignored them when it came to calculating executive pay.
The largest determinant of bosses' pay is a measure the Post Office calls "trading profit", which excludes the money set aside to compensate scandal victims, thereby increasing the pay of executives.
Chief executive Nick Read received a salary of £436,000 in the year ended 2022, plus a bonus of £137,000, as the Post Office was deemed to have recorded an above target trading profit if compensation provisions were ignored.
Mr Neidle said: "Bonuses have been paid to the executive team based on an apparent level of profitability which does not exist. If a public company missed an obvious tax point that made the business insolvent the shareholders would be demanding the CFO and CEOs head on a platter".
BBC News
The Post Office may have underpaid more than £100m in tax by deducting payments to victims of the Horizon scandal from its profits, say tax experts.
Claiming tax relief in this way could count as a breach of the law and could mean it is at risk of insolvency, said Dan Neidle, of Tax Policy Associates.
The company also may have overpaid senior executives, he says.
The Post Office said its financial information was "appropriate and accurate".
It has been paying out to sub-postmasters who have had their theft convictions quashed.
Repaying the alleged shortfall to HMRC could render the Post Office technically insolvent and would involve the government stepping in to financially support it.
However as the Post Office is owned by the government, exacting financial penalties is tantamount to the government fining itself and no-one is suggesting the Post Office will cease to function.
Corporation tax is paid to the government by UK companies and foreign companies with UK offices.
It is charged on their profits - the amount of money companies make, minus their costs such as staff and raw materials.
While businesses can claim corporate tax deductions for legitimate business expenses, costs related to penalties or fines are not generally tax deductible.
In this instance, the Post Office allegedly deducted the payments made to victims of the Horizon IT scandal from their revenue, resulting in a lower profit and therefore a lower tax bill.
Mr Neidle said: "The non-deductibility of compensation for unlawful acts is a well-known point."
Heather Self from accounting and advisory firm Blick Rothenberg agreed.
"The payments of compensation by the Post Office are almost certainly not deductible for corporation tax purposes, in my view. Not only is it difficult to argue that they were incurred for trading purposes, there is also a general rule of public policy that fines - or payments in the nature of fines - are not deductible."
The BBC understands that HMRC is investigating the way that the Post Office has accounted for the compensation payments and provisions.
In its most recently published financial accounts, the risk of a significant adverse tax ruling is acknowledged.
Notes to the accounts include the following: "As at the balance sheet date the company was engaged in discussions with HMRC regarding potential taxation liabilities that could arise in relation to past events but for which no liability has currently been recognised". It continues "the Directors recognise that an adverse outcome could be material".
Mr Neidle estimates that deducting postmaster compensation from the Post Office's trading profit would mean that it underpaid more than £100m in corporation tax.
The Post Office does not currently have enough money to pay that bill and would therefore, Mr Neidle argues, be technically insolvent.
A spokesman said that HMRC could not comment on specific business or individuals but said: "We collect the tax due under the law, creating a level playing field for everyone and funding public services." The Post Office said its financial information was "appropriate and accurate" and it was in discussions with HMRC and the Department for Business and Trade, which oversees the state-owned company.
Executive pay
While the Post Office appears to have deducted compensation provisions from their taxable profits, it apparently ignored them when it came to calculating executive pay.
The largest determinant of bosses' pay is a measure the Post Office calls "trading profit", which excludes the money set aside to compensate scandal victims, thereby increasing the pay of executives.
Chief executive Nick Read received a salary of £436,000 in the year ended 2022, plus a bonus of £137,000, as the Post Office was deemed to have recorded an above target trading profit if compensation provisions were ignored.
Mr Neidle said: "Bonuses have been paid to the executive team based on an apparent level of profitability which does not exist. If a public company missed an obvious tax point that made the business insolvent the shareholders would be demanding the CFO and CEOs head on a platter".
BBC News
Hacksawbob
Active Member
Wha I have never seen mentioned is where the missing money went? The heart of it accounting software is a balance sheet that has an audit trail. Hopefully the public enquiry will have the teeth to extract this information either from Fujitsu and/or the PO.
Well that is a difficult point really. Yes the Horizon system had problems BUT the Post Office had even greater problems. If they had been sensible and listened to their workers, who were only trying to do a good job this whole affair could and would have been avoided. Instead they ignore workers who had no previous problems and wrongly sided with Fujitsu . For that reason for me the post office were to blame and should shoulder the burden. If you buy a product that is faulty and it is pointed out to you by the users you do not ignore them and then pursue them like the Spanish inquisition! You point out what has happened and ask for explainations . And as MPFC will tell you ... " nobody expects the Spanish inquisition!"
Was there missing money? I do not think there was the faulty Horizon system was reporting losses that did not exist surely? What would be interesting to know is were there instances of excess profits on the balance sheets we are only hearing of losses.
On the face of it there's a whole load of collusion between PO and Fujitsu management at various levels. And it's all about money saving. What I'm wondering since the scandal was highlighted a few years ago how have they fixed (or hidden?) the apparent problems? If they haven't are they raising "adjustment" journals hiding discrepancies. If they fixed it I would want to see the 50 page slide deck that explains the ins and out, including full impact on the P&L and Balance Sheet, including detailed workings, and how much it actually cost the company/government/etc. AND I would want to speak to lower level staff who were/are involved it's often easier to get at the facts by talking directly to the worker rather than management who often sanitise reality.
That's what I would expect from independent consultants - and I have seen similar things happening in some private companies, we used to call it "cooking the books".
That's what I would expect from independent consultants - and I have seen similar things happening in some private companies, we used to call it "cooking the books".
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And now is appears they have been playing and loose with HMRC... £100 Million figure has been mentioned 
The problems with horizon were flagged to Tony Blair in 1998 before it went live
Yes, the compensation payouts to sub-postmasters probably aren't allowable under corporation tax rules and, if so, there will be tax to pay on this. However there may be a setoff as they apparently added the payments from sub-postmasters (in respect of false shortages) to their profits and have presumably paid tax on those receipts as income. It won't be anywhere in the region of the compensation paid out but still an argument that profits (and tax payments) were too high due to accounting errors.
Yes, I read that this morning and he apparently only signed off on it after assurances from Peter Mandelson. Seems everyone had their fingers in this pie.
the drama dealt with this briefly. I think it is right to say there wasnt any missing money - but in many cases the subpostmasters paid the PO what the PO said was missing. This most likely explanation is that this ultimately inflated the profits of the PO.
Hoppopotamus
Active Member
If this is truly so then the fault is 100% with whoever decided to go live and this has to 100% be the PO.
PO is responsible for paying compensation to the postmaster period.-
If Fujitsu hid evidence of bugs the PO could claim (subject to the contract claim funds from Fujitsu ).
If PO were told and decided to go ahead anyway (or due to a basic lack of competence did not understand what they were being told ) PO is responsible NOT Fujitsu.
Presumably PO were "satisfied" with the system when they handed over the payments for its purchase and implementation.
Mandelson told Blair going with it was the best option, so it looks like the government gave the go ahead
and as 100% shareholder the government must be responsible, irrespective of who knew what when etc. Even if Mandelson or Blair had attended the best management presentation ever they wouldn't have had a clue and if the topline numbers looked fine, in line with budgets, they would wave it through. I have attended many such meetings in private business, and the gaps between the "vision" and final reality have always been huge.
Didn't the post office evet think hold on , number 1 we all of a sudden have hundreds of ordinary hard working good standing people turning into thieves working for us or number 2 might be a problem with our system ? The po. Management should do time for their
I have been thinking about that, if the horizon program can be faulty reporting an incorrect balance loss surly there must have been errors in the other direction reporting excess profits . How many reported that ?
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