The UK Cabinet Office has abandoned a centralised recruitment platform, recording a £7.8 million constructive loss in its 2025-26 annual report. The Civil Service Jobs Applicant Tracking System (ATS) Programme was shut down to align with the Shared Services for Government Strategy, which aims to move Whitehall departments onto common software-as-a-service enterprise applications. The report admits that shared services clusters had raised concerns about the ATS as early as 2023, preferring to use the recruitment functionality of their own ERP systems, but the Cabinet Office did not assess a reset soon enough.
Separately, the department disclosed a potential penalty of up to £8.9 million from HMRC over historic IR35 off-payroll working compliance. Its total estimated liability for unpaid tax and National Insurance, including interest, is £38.5 million, of which £15 million was paid in February 2026. The final settlement remains under negotiation, and the Cabinet Office considers the penalty unlikely because HMRC can suspend penalties subject to compliance conditions.
Dave Chaplin, CEO of IR35 compliance firm IR35 Shield, said the assessment raises serious questions about compliance at the heart of government. "Claiming to take reasonable care is not the same as being able to demonstrate it," he said, urging organisations to back IR35 determinations with robust processes and evidence. The episode underscores how both major IT projects and contractor tax handling remain weak points for the Cabinet Office.