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Horizon: The 20-year accounting software scandal


The saga of the Post Office Ltd Horizon accounting system spans more than two decades. This chronology tracks how the Horizon scandal played out on the pages of AccountingWEB since the system was introduced in 2000.

28th Apr 2021
Editor at large AccountingWEB
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On Friday 23 April, the Court of Appeal overturned the convictions of 39 subpostmasters on charges of theft, fraud and false accounting arising from discrepancies logged on the Post Office’s Horizon accounting system.

Hailed by The Guardian as “one of the biggest miscarriages of justice in British legal history”, the Horizon affair has rumbled on for more than 20 years, ensnaring as many as 900 subpostmasters in legal cases and claims that led to financial ruin, prison and in some cases suicide.

In their written summary of the case, the judges said the failures of investigation and disclosure were “so egregious as to make the prosecution of any of the Horizon cases an affront to the conscience of the court".

At the time, the Post Office had the power to prosecute its operators. By refusing to acknowledge known bugs in the Horizon system and treating shortfalls from an unreliable accounting system as an incontrovertible loss, Post Office Limited reversed the normal burden of proof and insisted the accused prove there had been no losses, the judges noted.

“Defendants were prosecuted, convicted and sentenced on the basis that the Horizon data must be correct, and cash must therefore be missing, when in fact there could be no confidence as to that foundation.”

Immediately after the court decision, the call went up for a full public inquiry into the case and to begin working out suitable compensation for those affected. To set the scene ahead of any such enquiry, we tracked the Horizon case as accountants experienced it in the AccountingWEB archives.


The Post Office first introduced its new Horizon computer system to its network of UK sub-post offices. The software had been developed by IT giant Fujitsu.


Commenting in the wake of the Court of Appeals decision last week, AccountingWEB member hfiddes recalled: “I remember signing a petition in support of our longstanding local postmaster in East Twickenham when he lost his job around 2002… That was when the local MP and newspaper got involved, but it puzzled me at the time how it took years for wider support to build so it got to court cases etc.”

In subsequent years, more and more cases emerged elsewhere in local media, but were rebuffed as isolated cases by the Post Office, which pursued any incidents where the takings of sub Post Offices varied from the Horizon figures as “false accounting”.


The Justice for Subpostmasters Alliance was founded in 2009 to help subpostmasters and mistresses who were afraid to go public with information or problems with Horizon for fear of prosecution.


In June 2012, the Post Office appointed external investigators, forensic accountants Second Sight to examine the allegations.


January – Working with Second Sight, JFSA issued a call for evidence to be collected in confidence to feed into the independent examination.

JulySecond Sight’s interim report found no evidence of systemic problems with the core software, but it did find evidence of internal bugs. On two occasions in 2011 and 2012, “defects” in Horizon resulted in a shortfall of about £9,000 at 76 branches. The Post Office took a year to realise that the second computer defect had happened.

Frenkels Forensics partner Vivian Cohen told AccountingWEB that he had represented a sub-postmaster in court and argued that Horizon wasn’t always reliable and other people in the Post Office could enter transactions besides his client. The subpostmaster got a suspended sentence. “People can be sent to prison quite often on the basis of a computer error,” said Cohen.

The Post Office later made good the losses arising from the bugs that Second Sight identified and the sub-postmasters were not held liable. Though relatively benign in its findings, the interim report raised enough doubts to mark the turning point of the Horizon saga. [DW1] 

August – Durham subpostmaster Tom Brown was cleared of stealing £85,000 after a five-year prosecution, while in Cornwall sub-postmistress Susan Knight was also cleared of false accounting.

September – After the full Second Sight report into Horizon was leaked, David Winch commented on AccountingWEB:  “I have come across criminal prosecutions of postmasters/postmistresses in respect of apparent shortfalls arising from comparison of Horizon figures and actual cash & stocks… Of course it is absolutely routine for wrongdoers to deny wrongdoing – but the number of these instances in Post Offices is disturbing.”


Friction developed between Second Sight and its client after the accountants claimed the Post Office withheld relevant documents. The Post Office terminated the accountants’ contract and disbanded the working party. Second Sight nonetheless produced a confidential report.

In extracts from the Second Sight report obtained by BBC reporter Nick Wallis, the forensic accountants concluded that the design objective of producing a clear transactional audit trail allowing easy investigation of any errors “had not always been achieved”.

The Post Office rebuffed the findings and denied any suggestion it improperly withheld information from the accountants or that the Horizon system suffered serious deficiencies. In a counter-report on its website the Post Office said “an exhaustive and informative process” confirmed there were “no system-wide problems with our computer system and associated processes”.

The Parliamentary select committee for Business, Innovation & Skills investigated the affair and warned the secretary of state about a “lamentable lack of information provided to Second Sight” and urging the government to investigate these concerns.


Although numerous Horizon cases were in progress and sub-judice, the BIS select committee undertook an inquiry on the future of the Post Office network.


June – Publishing its findings, the BIS select committee chair commented, “If the government is really committed to taking action that delivers for the victims of this scandal it should bring forward a judge-led public inquiry.”

11 December - the Post Office agreed a settlement with a group of 550 claimants in which chairman Tim Parker apologised: “In the past, we got things wrong in our dealings with a number of postmasters.” The undertaking to “reset” the organisation’s relationship with postmasters was accompanied by a £57.75m payment. After allowing for the costs of fighting the case, the claimants are likely to share £10m – less than £20,000 each.

16 December – In a verdict in favour of the subpostmasters’ association (Bates v Post Office [2019] EWHC 3408 (QB)), Mr Justice Fraser ripped into the Post Office’s evidence and concluded: “Horizon was not remotely robust. The number, extent and type of impact of the numerous bugs, errors and defects that I have found… makes this clear.”

He added that the Post Office’s continual attempts to play down the evidence from postmasters demonstrated “a simple institutional obstinacy or refusal to consider any possible alternatives to their view of Horizon, which was maintained regardless of the weight of factual evidence to the contrary… This approach by the Post Office has amounted, in reality, to bare assertions and denials that ignore what has actually occurred… It amounts to the 21st century equivalent of maintaining that the earth is flat.”


March – Following the conclusion of the Commons business committee investigation and the 2019 civil claims, the Criminal Cases Review Commission (CCRC) referred the cases of 42 convicted Post Office Ltd employees to the Court of Appeal on the grounds of abuse of process. They included subpostmasters, subpostmistresses, managers and counter assistants.

Second Sight’s Ian Henderson and Ron Warmington told the commons investigation how the Post Office had thwarted their investigation. “We identified evidence of flaws and bugs in Horizon. We also heard direct evidence of Post Office or Fujitsu altering transactions and balances without the knowledge of subpostmasters. Not only did Post Office refuse to accept that, but they refused to supply to Second Sight the documents that would enable us to investigate that issue,” said Henderson.


April – Following the Court of Appeal decision, in which the convictions of 39 of the 42 appellants were quashed, the status of any public enquiry and the compensation due to claimants (including those who had reached the 2019 settlement and are currently left out of any further legal awards) is yet to be resolved. Several AccountingWEB members took the opportunity to offer their perspective on the case in Any Answers.

* * *

Looking back over the chronology, longstanding Horizon-watcher David Winch told AccountingWEB: “Because postmasters were contractually obliged to make good certain shortfalls pretty much immediately out of their own pocket, some of them resorted to manipulating the figures to hide the shortfall. They may well have considered that – given a bit of time – they could work out what had gone wrong and correct it.

“As things turned out they were not able to resolve the conundrum at the time and when the Post Office auditors turned up they were shown to have manipulated the figures. So they were prosecuted and convicted of ‘false accounting’ for that manipulation – not for theft of cash.

“Since these Postmasters DID manipulate the figures, they did ‘gain’ in the sense that it delayed them having to pay up to cover the system shortfall and many of them did plead guilty to ‘false accounting’ at trial. One might expect that in these cases the Court of Appeal would have concluded that the convictions should be upheld.”

As things turned out, the Court of Appeal quashed these convictions – as well as the theft convictions – because it held that Post Office Ltd knew there were bugs with Horizon, but nevertheless insisted that the Horizon data was wholly reliable and accurate, when it had a legal duty to disclose to the defence any information which might assist the defence. As a consequence, these defendants did not get a fair trial and their convictions must be overturned.

“The only convictions not overturned were three cases in which the Court of Appeal found that Horizon data had not been an essential ingredient in the prosecution case,” said Winch.

This level of criticism of a prosecutor happens only very rarely in the appeal courts, he added.


Replies (24)

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By Tornado
28th Apr 2021 22:56

So The Post Office continued to defend its software even when it was clear to all that it was seriously defective. This is a scandalous miscarriage of justice fed by arrogance, privileged position and vanity.

Perhaps a timely reminder to HMRC that many people believe their MTD plans are seriously flawed and need to be thoroughly reviewed and tested before relying on these systems to perform correctly in general use.

Thanks (18)
By Paul Crowley
29th Apr 2021 02:03

If this was something from the USA I would not be as disappointed as I am in the level of cover up and deceit.
Why are those involved in the cover up not held personally liable for the loss of reputation, freedom, and lives of those who suffered.
They knew and could not give a flying f**k

Thanks (7)
Replying to Paul Crowley:
By Nick Graves
29th Apr 2021 11:38

Paul Crowley wrote:

If this was something from the USA I would not be as disappointed as I am in the level of cover up and deceit.
Why are those involved in the cover up not held personally liable for the loss of reputation, freedom, and lives of those who suffered.
They knew and could not give a flying f**k

I have a horrible suspicion that cover-up and deceit is now a feature, not a bug.

I believe it is now endemic and the fall-out will be catastrophic. And not limited to accounting matters.

Thanks (4)
By memyself-eye
29th Apr 2021 10:52

so, many many individuals, most with little or no accounting experience are in a situation where faulty software is imposed upon them by an overbearing monolithic organisation which - despite being told by them wot knows- insist that the software is the way to go and many years later it is proved wrong but denies all liability.
Fast forward 10 years to MTD for all.

Jail anyone?

Thanks (11)
Replying to memyself-eye:
By flightdeck
29th Apr 2021 21:51

Agreed. And it is very, very worrying. Who is next?

Thanks (0)
By CJaneH
29th Apr 2021 11:07

I listened to the Radio 4 serial documentary last May and am listening to it again. I have also read newspaper reports. We know the systems had 'bugs' and I would assume that transactions were duplicated. I would like to know what access the Sub postmasters had to the data inputted from their post office. Reading between the lines it appears to me that.

A. There was no access to detailed daily transactions. There should have been a daily print out showing each transaction and distinguishing between cash, cheque and card. If this had been available the sub postmasters could have identified duplications and corrupted transactions.

B The advice seems to have been to check the cash balance they were suppose to have at a month end and then to count the cash and see if it matched. Far to long a period.

C The apparent shortfalls were so great I wonder if duplicated card transactions were treated as cash if not matched to a bank entry. I am assuming a card payment at a Post Office goes into a Post Office Bank.

Can anyone confirm to me if my assumptions are correct.

Nobody should be held responsible for apparent cash shortfalls if there is no system for them to record and control the cash.

I am not only angry with the Post Office to being so blind to its failings but also disappointed that General Media such as the Telegraph, Guardian & BBC and the specialised media aimed at accountants did not discover this much earlier.

Thanks (7)
Replying to CJaneH:
By hfiddes
29th Apr 2021 11:39

I'm still trying to understand all the problems but I think you're right on A. Plus it seems neither side had access to a full transaction history (you'd have thought the PO would have had that anyway - but it seems not!)
There is also the question of remote access. Initially, the PO denied there was any and then it turned out there was - so was there tampering?

Thanks (2)
Replying to hfiddes:
30th Apr 2021 10:56

More likely incompetence. There were several documented instances of shortfall figures mysteriously doubling, which suggests that somebody somewhere (likely a Fujitsu IT person) was trying to correct the problem but put the adjusting entry through the wrong way round.

Thanks (1)
Replying to CHIPD:
By Paul Crowley
04th May 2021 17:10

The doubling fairly certainly confirms an attempt at correction done by IT.
IT still think in debits and credits from their bank account statements

Thanks (0)
Replying to CJaneH:
David Winch
By David Winch
29th Apr 2021 12:17

From my experience of dealing with Post Offices at that time they 'balanced' weekly (not monthly). However there could be a lot of transactions in a week.
Also many of these outlets were sited within general shops selling, e.g. stationery, gifts, etc. There could be an issue segregating the Post Office takings from the shop takings.
This was particularly so in my experience where there were National Lottery sales as the NL terminal was often sited in the general shop area but NL takings were put through the PO counter. So if the shop did not pay the PO counter for the NL sales there would be a cash shortfall in the PO counter (which the subpostmaster would be required to make good).
So it was possible that there were accounting errors in the outlet which were producing the shortfalls - especially as the Horizon system was 100% reliable ....

Thanks (2)
By Nina_Guinness
29th Apr 2021 11:09

Great article giving the in-depth story - the detail at the end is really good, it explains a lot about how this became such a mess.

Thanks (3)
By whiteandco
29th Apr 2021 11:24

I have been watching this unfolding over the years with total horror. This is the ultimate result of the total reliance on computers and I believe is only the tip of the iceberg.

If it is worked out by a computer it must be right, so they say. Then when something goes wrong to try and speak to anyone with any form of sense is nigh impossible. It doesn't matter whether it is the Post Office, Banks, Utility Companies, BT or HMRC there is this layer of call centers all siloed from each other with no form of verbal communication and to break through those is truly a mission in itself. I know, because I have lost count of the hours wasted trying to do exactly that.

Last week I submitted my Client's Pllds for their 4 electric company cars and have just received the tax codes for the individuals concerned, all K codes. It would appear that the HMRC system could not process a 0% P11d, so has just taken 25% of the list price of the car as the benefit. When I asked whether or not I should submit P11ds for these cars, I was told yes, because it was still a benefit even though the benefit is 0% because next year the benefit increases to 1%.

The other day I realised that a corp tax refund had not been received - the Amended CT600, although received had not been processed.

Goodness knows how many people who import goods from the EU will submit correct VAT Returns. I have just submitted one and it took me a whole morning it entailed deferred VAT, postponed VAT, purchase of licences and goods under £135 and when I ran the detailed report, very few transactions appeared in the correct boxes. It would have been quicker and more accurate to have processed this manually. And it just gets worse as HMRC blindly march to achieve their utopian dream of MTD.

Thanks (6)
Replying to whiteandco:
By carnmores
04th May 2021 17:28

There is a problem with amended CT600s being processed. This should be sorted out asap?

Thanks (0)
Replying to carnmores:
By whiteandco
04th May 2021 17:36

Amongst all the others. When I asked if I would be advised of the resolution to the issues mentioned above, they said I should just keep checking my Agent's account. So far nothing more has been done. So I am guessing my queries are now in a never ending pile awaiting manual intervention.

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By derekgfrench
29th Apr 2021 12:30

I worked for 18 months at weekends in a community shop with two tills. One for the cafe and shop, the other was the sub-post office counter. The cafe till would be correct to the penny. The post office till cash, which we checked daily, could be £20 under in a day. Cash received for national lottery ticket sales, or paid out for lottery ticket prizes, didn't always appear in that days audit trail which was one complication. Sometimes we could reconcile the cash of the post office till, and other times we took money from the cafe side to top-up the post office till! That's one way for the post office to make money...

Thanks (3)
By North East Accountant
29th Apr 2021 13:26

The Post Office is a total and utter disgrace and the people responsible should be held accountable.... but they won't be.

We had clients caught up in this and the impact on their lives has been nothing short of devastating.

The Post Office used their unlimited Government resources (taxpayers money) to try and cover up their own failings rather than accept responsibility for their mistakes. We see it all the time, Windrush, Hillsborough, etc where the Government (or their agencies) fail and cover up and do anything to not accept the consequences...god knows what we never hear about.

Imagine when HMRC's MTD computer gets some rubbish feed in from a third party direct to our personal tax account, and we're trying to prove it's wrong..... just like the sub-postmasters.

Thanks (8)
By Brend201
29th Apr 2021 13:26

The postmasters settled in the High Court in December 2019 and it seems likely that a large chunk of the settlement amount went to the company that provided funding for their case (litigation funder Therium). The poor victims appear to have got very little compensation relative to the suffering and distress that they endured. Yet the perpetrators appear to have avoided all personal responsibility, although they undoubtedly reaped the benefits along the way.

Thanks (5)
By AthenaSolutions
29th Apr 2021 15:55

What really gets me here is the delays. Justice delayed is justice denied. People had their health, finances, family life, mental health, self esteem, local reputations completely wrecked; some lost their liberty, some lost their lives. And for the victims, the lawyers got most of the settlement; so there has not even been financial reparation for this level of distress.
I cannot understand how this was allowed to fester this long . I accept that the the PO used its money and might to squash the victims, but I also cannot understand why it was left to the victims to form a support group 9 years after the Horizon implementation. Nothing from the CPS raised questions; no legal group helped them get together; and our profession equally did not pull together to go that extra mile.
Perhaps we accountants need a little self-reflection on this one also.

Thanks (2)
Replying to AthenaSolutions:
By North East Accountant
29th Apr 2021 17:45

Perhaps some in the profession did not go the extra mile but speaking for ourselves not only did we go an extra 100 miles we were there to carry our clients across the financial wasteland when they could no longer walk..... not getting paid for years on end either.

Thanks (0)
By Mr J Andrews
30th Apr 2021 09:21

A very concise article which demonstrates that the miscarriage of justice owing to a flawed computer system has not been, nor never will be, fully resolved. The ''Powers That Be'' were aware of shortcomings but akin to the Emperor's New Clothes, a pretence was allowed to continue.
Both the HMRC hierarchy and the Profession are aware of the ridiculous shortcomings with MTD but have any lessons been learnt ? I think not.

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By Tornado
30th Apr 2021 10:25

I think 'Claims against HMRC 4 You' will appear sooner or later as more people feel pushed into making errors simply because they do not understand the software they will be required to use.

In other circumstances (e.g. Driving a car) a test has to be passed and a licence/Certificate issued before you are deemed competent to drive a car. It should be a requirement that you will only be required to use MTD associated software if HMRC have trained you in its use and issued you with a certificate of competence.

Thanks (1)
Replying to Tornado:
By North East Accountant
30th Apr 2021 12:49

That's a great idea.

Speaking of cars we had a garage owner who got Sage (no training required he said "it's a doodle this accounting lark") and when he was bored like to make journal entries just for the fun of it. Not real ones just various adjustments.

One year there was 170 odd none of which had any substance at all.

Thanks (0)
Replying to North East Accountant:
By Paul Crowley
04th May 2021 17:22

Second hand car dealer bought sage
Same version of its a doddle
first and only complete year showed a bank balance of £500,000, true figure £20,000 other way

He is now on a trade specific software
All together now 'the trial balance does not balance' but only £300,000 out

Thanks (0)
By carnmores
01st May 2021 16:59

And where was the DPP twiddling his thumbs ignoring a very important public issue. Sir Keir Starter hand back your knighthood

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