HM Treasury has made the Social Security (Contributions) (Amendment No. 7) Regulations 2025 (SI 2025/1132), laid on 29 October 2025 and commencing on 20 November 2025. The instrument adds Capture Redress Scheme compensation to Part 10 of Schedule 3 of the 2001 Contributions Regulations, so that these sums are ignored when calculating earnings for Class 1 National Insurance. The Capture Redress Scheme opened today to accept a first tranche of applications.
In scope are payments made by the Department for Business and Trade (DBT) to a person under the Post Office Capture Redress Scheme and payments made to a “nominated individual”. A nominated individual is a person who was a shareholder or director of a company, or a partner in a partnership, which has since ceased to exist and which would otherwise have been eligible for compensation under the scheme.
The Regulations also cover “relevant onward payments”. This caters for cases where a company receives scheme compensation and then passes some or all of that amount to an individual who is or was a director or employee of that company, for the purpose of passing on the redress. The term “relevant onward payment” uses the existing definition in paragraph 28(5) of Part 10 of Schedule 3 to the 2001 Regulations.
For context, the “Capture” system refers to the Post Office’s in‑house accounting software used in the 1990s prior to Horizon. Government set out the structure, scope and eligibility for the Capture Redress Scheme on 19 June 2025, following an independent investigation by Kroll that found a reasonable likelihood the software created shortfalls for postmasters.
Operationally, phase one of the scheme opened on 29 October 2025 for up to 150 applications. Eligible claimants receive a preliminary payment of £10,000, with final awards determined by an independent panel using a banding model up to £300,000, and the possibility of higher awards in exceptional cases.
Payroll impact is specific to National Insurance. From 20 November 2025, employers should not include covered Capture redress onward payments in NIable earnings for Class 1 purposes. Direct DBT payments made to individuals sit outside payroll and require no Class 1 NIC calculation. Employers should retain documentation linking any onward payment to a DBT award (for example, award letters or board approvals) in case of compliance checks.
These Regulations do not set the income tax treatment. HMRC will publish tax guidance and a Tax Information and Impact Note in the normal way; employers and advisers should review that material alongside this NIC change.
The instrument applies across Great Britain and Northern Ireland. It is made under section 3 of the Social Security Contributions and Benefits Acts for Great Britain and Northern Ireland, with the concurrence of the Secretary of State for Work and Pensions and the Northern Ireland Department for Communities, mirroring the usual approach for NI contribution rules.
The approach aligns with earlier changes made in July 2025 to disregard other Post Office‑related compensation for NIC purposes, providing consistency across redress schemes as payments flow to affected individuals.
For claimants, DBT guidance confirms how to apply, the phased intake and security steps, including that any request for bank details will come from an email ending “@businessandtrade.gov.uk”. Applicants should use the official GOV.UK route only and keep records that may assist any employment or tax queries arising from awards.