The Welsh Government has paid £19 million to HMRC to settle a Natural Resources Wales tax bill.
The environment body, which is currently considering the future of three visitor centres as it looks to plug a £13 million budget deficit, was subject to a tax probe over the way it hired specialist contractors.
Presenting the annual report of accounts at NRW, Deputy First Minister, Huw Irranca-Davies, said: “Members may want to note that Natural Resources Wales’ Annual Report and Accounts for 2023-24 include details of HM Revenue and Customs’ (HMRC) investigations into NRW’s historic compliance with off-payroll working (more commonly known as IR35) requirements, and the extent of the potential liability that maybe owed.
NRW and HMRC are continuing to discuss this matter in order to bring about a resolution.
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“Since becoming aware of the matter, the Welsh Government has increased its engagement with NRW to track and monitor its progress in resolving the issue and to learn lessons from how the position came about.”
Reacting, Mark Isherwood MS, Chair of the Public Accounts and Public Administration Committee, said: “It is shocking to hear about the scale of Natural Resource Wales' potential tax bill and the payment of £19m it has made to HMRC with Welsh Government money. It could not have happened at a worse time for public finances.
“Given Natural Resources Wales' track record in relation to its decision making and contracting processes - which were found by the previous Public Accounts Committee to be wholly unsatisfactory - this is extremely worrying.
“Clearly an issue of this magnitude demands answers and the Committee will be bringing both Natural Resources Wales and Welsh Government in for scrutiny at the earliest opportunity.”
Llyr Gruffydd MS, Chair of the Climate Change, Environment and Infrastructure Committee, said: “We are extremely concerned by the Welsh Government statement indicating that NRW may owe HMRC £19million.
“This is a very serious situation; I urge all parties to resolve this dispute and ensure that the Welsh taxpayer is not short changed. Staff at NRW provide an important service for the people of Wales, and it is vital that they are able to continue to deliver this work at this challenging time.
“Our role as a Committee is to scrutinise the Welsh Government and arms-length bodies such as NRW to make sure that they are working effectively and delivering for the Welsh public. We will be keeping this worrying matter under review.”