Huw Irranca-Davies, Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs
HM Revenue and Customs (HMRC) has concluded its investigation into Natural Resources Wales’ historic non-compliance with off-payroll working rules (commonly known as IR35), resulting in a final settlement of £14.6m. I issued Written Statements to Members to keep them informed in relation to this issue in October 2024 and February 2025.
As part of the settlement, HMRC imposed a £2.9m penalty. This penalty has been suspended for 12 months, subject to Natural Resources Wales meeting specified compliance conditions during that period. Natural Resources Wales has reviewed its processes to ensure it continues to be compliant.
To support Natural Resources Wales during the investigation, the Welsh Government provided interim funding to enable a Payment on Account to HMRC in 2024. The Welsh Government has agreed budget reduction arrangements with Natural Resources Wales to recoup this funding.
These arrangements have been carefully developed to ensure they are affordable and minimise any impact on Natural Resources Wales’ ability to deliver its core functions and statutory responsibilities.