NRW pays £14.6 million for IR35 compliance failure
Natural Resources Wales will pay 14.6 million pounds to settle tax violations arising from misclassifying contractors as employees under employment status rules between 2017 and recent years. The Welsh government body also faces a 2.9 million pound penalty that authorities suspended for 12 months.
The agency stopped hiring external workers and changed its review procedures after admitting mistakes in applying IR35 regulations. Chair David Henshaw accepted blame but noted the framework remains difficult to navigate for many organizations.
Compliance specialists said the settlement shows how expensive misreading the rules can become for government departments. The IR35 system transferred responsibility for determining worker status from individuals to employers when it took effect in the public sector back in 2017.
Tax officials have collected millions from other agencies that made similar errors since the policy began. Natural Resources Wales pledged to work with advisers to prevent future problems with contractor arrangements.
