THE Welsh government has paid £19m to settle a tax bill at its environment agency, Natural Resources Wales (NRW), according to reports.
It follows an investigation by HM Revenue and Customs (HMRC) into the way NRW hired specialist contractors.
Deputy First Minister Huw Irranca-Davies said the government "increased its engagement" with NRW, but the Conservatives said the organisation should be broken up.
According to the BBC, NRW is still talking to HMRC about the final bill, which could be higher. Forestry Journal has contacted the agency for comment.
Its responsibilities include managing forests, responding to floods and granting environmental permits. In recent times, its forestry wing has been criticised by the industry for having a "negative attitude" towards the sector. More than 250 jobs also remain at risk across NRW.
Its annual accounts say an HMRC investigation revealed a "potential liability" related to specialist contractors.
NRW said it paid the £19m "without any admission of liability" for unpaid income tax, National Insurance contributions or the apprenticeships levy.
The money is also meant to cover interest payments, but discussions about the final debt are continuing and a "wide range of values are possible".
The Welsh government said it would discuss how NRW can repay it when there was a final bill to HMRC.
NRW told the national broadcaster it could provide no further details while the case continues.
In a statement, it said: "We continue to discuss this matter, and the extent of the potential liability, that may be owed in order to achieve a resolution."
Irranca-Davies, whose responsibilities as climate secretary include forestry, said: "I have asked my officials to work with NRW to develop enhanced monitoring arrangements to provide assurance and confidence in the oversight and financial and risk management arrangements in place.
"I have also asked the chair of NRW to take a number of steps to further enhance capacity and capability within NRW."
He said the investigation was into NRW's "historic compliance with off-payroll working".
A tax rule known as IR35 says off-payroll workers should pay broadly the same income tax and National Insurance as regular employees.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here