Ministry of Defence: Fines

(asked on 2nd November 2021) - View Source

Question to the Ministry of Defence:

To ask the Secretary of State for Defence, with reference to page 108 of his Department's Annual Report and Accounts 2013 to 2014 and page 172 of his Department's Annual Report and Accounts 2014 to 2015, if for what reasons his Department was fined (a) £31.6 million and (b) £1 million by HM Treasury.


Answered by
Jeremy Quin Portrait
Jeremy Quin
This question was answered on 9th November 2021

ARAc 2013-14 - £31.6 million Fine from HMT

There were no fines of this value reported in the MOD ARAc 2013-2014 publication. A fine of this amount however was reported in the MOD ARAc for 2015-16 and it is this entry that we assume is being referenced in the question.

This fine related to instances where the Department had not appropriately sought nor gained necessary approval from HM-Treasury prior to the placement of some contracts. As a result of this procedural failure, HM Treasury imposed a £31.6million fine upon the Department. The Department undertook extensive action to address the procedural weaknesses, no further fines of this nature have been imposed upon Defence in the subsequent years.

ARAc 2014-15 - £1 million Fine from HMT

This HM Treasury fine was imposed for failures by the Department to seek assurance from a number of high-paid off-payroll appointees that they were paying the correct tax and National Insurance. This relates to procedural failures to seek assurance as part of the onboarding process for off-payroll staff to confirm the arrangements in place for those individuals to pay income tax and national insurance. The Department has implemented revised processes for the management of off-payroll employees including the new responsibilities placed on employers by changes to IR35 legislation. As a result, no further fines of this type have been imposed since.

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