Another public sector body has been issued a multi-million-pound tax bill – of £36m – after being found to have breached the off-payroll working rules (IR35).

As reported in Computer Weekly, UK Research and Innovation (UKRI), revealed in its annual accounts for 2021/21 that HMRC deemed that it had misclassified contractors’ IR35 status and as a result, owed £36m in tax. 

UKRI is a body sponsored by the Department for Science, Innovation and Technology (DSIT). It is the latest public sector body to have mismanaged the off-payroll working rules.

The tax bills issued to public sector bodies due to non-compliance now amount to approximately £300m.

Qdos CEO, Seb Maley, commented:

“Public sector bodies have now been hit with around £300m worth of IR35 bills. It’s astonishing. These bodies should be leading by example, showing private sector businesses how to successfully manage the off-payroll working rules. 

“I’m not sure what’s more worrying – the sheer size of this bill or the fact that it’s something we’ve come to expect in the public sector. And I can’t help but wonder who’s next. 

“It’s difficult not to see the irony in this one. As a body that champions innovation, getting to grips with the off-payroll working rules shouldn’t be an issue for UKRI in theory.

“It’s wooden dollars in the public sector, but if a private sector business was hit with a £36m bill, it could be curtains. With this in mind, private sector firms must prioritise their compliance.”

 

 

 

 

Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.