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HMRC paid Fujitsu £310m last year, but Post Office supplier’s UK business faces gradual decline

While victims are made to fight for every penny they are owed, the IT supplier at the centre of the Post Office scandal is handed hundreds of millions of pounds by UK government

Karl Flinders
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Published: 10 Jun 2025 12:00

Fujitsu received £310m from HM Revenue & Customs (HMRC) in 12 months, while victims of the Post Office scandal, which the IT giant had a hand in, are offered “derisory” compensation payments.

According to official figures, HMRC is Fujitsu’s biggest UK government customer, described by some as the supplier’s “UK cash cow”, with about £310m paid to Fujitsu by the government department between April 2024 and the end of March 2025.

Computer Weekly recently reported that HMRC paid Fujitsu almost £80m in March alone, but the supplier’s business stretches across the public sector. For example, it has contracts with central government departments such as the Home Office, the Foreign Office, the Ministry of Defence and the Department for Education. It also works across local government and other public services. According to figures from Tussell the UK public sector as a whole spent about £450m during the period, with the Home Office its second biggest customer with £78m spent.

Peer Kevan Jones, a long-time campaigner for subpostmasters caught up in the Horizon scandal, said: “This is outrageous. The government should stop any further payments to Fujitsu until they at least make an interim payment to the compensation fund for postmasters.”

The government is heavily dependent on Fujitsu, and the supplier is dependent on government contracts for its UK business.

Money going one way

The government announced this week that £1bn has been paid in compensation to Horizon scandal victims so far, just part of the huge financial cost of the scandal, with not a penny of it coming from Fujitsu. The supplier is at the centre of the scandal – it was Fujitsu’s software that caused unexplained account shortfalls and its staff who covered them up in court.

Money is currently heading in one direction, as the Japanese supplier continues to win lucrative UK government contracts.

All of these payments came after Fujitsu’s self-imposed ban on bidding for new government contracts, announced in January 2024. This followed the broadcast of ITV’s dramatisation of the Post Office scandal, which raised public awareness of Fujitsu’s involvement, causing a public opinion backlash.

But the supplier doesn’t need “new” contracts because it has existing relationships throughout the UK public sector. Computer Weekly also revealed, via a leaked document, that Fujitsu staff had been instructed how to bypass the ban.

Business is still booming for Fujitsu. According to sources, all UK staff will receive a bonus this year after a sales target was reached. It is details like these that led peer Jones to describe the self-imposed bidding ban as a “hollow” gesture.

Fujitsu is currently in talks with the government about how much money it will contribute towards the full cost of the Horizon scandal.

Bedded in

Fujitsu sources said: “Fujitsu is too embedded to see its government business collapse, but there is already a gradual decline and a growing nervousness amongst customers, who are questioning whether Fujitsu is a reputational risk they can afford.” 

“A slow cancellation” has begun, according to the sources. For example, HMRC began the process of breaking away from its heavy reliance on Fujitsu for IT services with a tender worth £500m designed to exit the supplier’s services. According to the tender published last month: “The primary objective of the [programme] is to exit three Fujitsu-hosted datacentres and migrate associated services to new destination platforms.”

Until Fujitsu has done the right thing, the UK government has got to act in a principled way and send a message out to the world that the UK does the right thing
James Hartley, Freeths Solicitors

Fujitsu has also lost its lucrative Horizon contract with the Post Office, which has been running since the 1990s and earned it billions of pounds. The contract ends in the next 12 months.

The Post Office will finally replace the controversial Horizon system with an off-the-shelf alternative. As part of the plan, Fujitsu will not be involved from March next year, with the Post Office also looking for a new supplier to tide it over when the current Fujitsu contract expires.

And it is not just the public sector where Fujitsu faces cuts. As revealed by Computer Weekly in November 2024, the supplier lost out on a contract with British Gas owner Centrica after the company’s board, fearful of reputational damage, blocked it, despite the troubled supplier being the preferred bidder.

Last month, when asked about Fujitsu’s work for HMRC, peer James Arbuthnot, a campaigner for justice for subpostmasters for a decade and a half, said: “Why on earth is the government undermining its own bargaining position with Fujitsu, a company that has yet to pay a penny towards the carnage it helped cause in the Post Office?”

He stressed that the entire bill for paying back money to the subpostmasters has come from taxpayers.

Waiting game

The public inquiry into the Post Office scandal is expected to publish its initial report on phase one, which looked at the human impact of the scandal, in the coming months. Like its dramatisation, the report will increase media attention and heap pressure on Fujitsu and government departments that contract with it.

“Fujitsu leaders are nervously waiting for the publication of the first report,” said Fujitsu sources.

James Hartley, a lawyer at Freeths Solicitors, which represents hundreds of subpostmasters, said Fujitsu is “keeping its head down” until the public inquiry report comes out, at which point the government will probably “lean on it for a billion pounds”.

“We all know that the government could rattle off a whole load of reasons as to why it’s in the UK’s interest to keep using Fujitsu, but that doesn’t change the fundamental principle about doing the right thing. Until Fujitsu has done the right thing, we would say the UK government has got to act in a principled way and send a message out to the world that the UK does the right thing.”

He said the problem is leverage. “I think with Fujitsu, the only large entity that could sue them is the Post Office, which obviously the government would have to make happen. The reason I think it never has, and why they won’t, is because they know damn well that Fujitsu’s lawyers will turn around and say, ‘Well, yeah, alright, we accept those things wrong with the system, but the main cause of the overall problem was the way Post Office decision-makers acted’.”

The financial cost of the scandal goes way beyond compensating victims and is all paid from taxpayers’ money. The legal costs are massive.

Every expert involved is getting paid. There are the lawyers negotiating compensation on behalf of the Post Office. In 2018, there was a High Court Group Litigation, described at the time as a £100m trial. The Court of Appeal heard appeals against wrongful convictions, with hundreds of lawyers involved. A statutory public inquiry followed, which itself cost about £50m to run, with the government-owned Post Office spending in excess of £100m on legal fees to defend it.

On top of that, there are civil service costs to add to the final bill, and the cost of failed attempts, made under pressure, to replace the Horizon system. The Post Office, for example, had to abort its New Branch IT project after a government report found that budgets ballooned from £180m to £1.1bn and implementation was delayed by as much as five years.

The Post Office scandal was first exposed by Computer Weekly in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to the accounting software (see timeline of Computer Weekly articles about the scandal below).

Timeline: Computer Weekly articles about the scandal since 2009

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