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FCA asks James Hay parent to set aside £15m in tax dispute

The FCA has asked James Hay parent IFG Group for additional capital of £15m to address its ongoing tax dispute with HM Revenue and Customs.

Following a supervisory review and evaluation process of capital adequacy at IFG, the regulator has required the group to increase its regulatory capital.

It includes a requirement that IFG set aside capital upfront to cover a “prudent outcome” to the ongoing dispute over the biofuels scheme Elysian Fuels.

In a statement, IFG says it is “accordingly engaging with the FCA on a plan and timetable to address this regulatory capital deficit and enable IFG to return to a position of capital surplus.”

The dispute has been ongoing for two years, after James Hay’s parent revealed the legal battle around unpaid tax on investments in Elysian Fuels. Through Sipps provided by James Hay, around 500 clients put £55m in the scheme which included a bioethanol plant in the US and a renewable fuels refinery in the UK.

A trading update released in February this year outlined a “potential resolution” of the biofuel scheme tax charge that had seen it shell out £1.6m in legal and remediation costs to date was still in the works, and if the matter is unresolved by March, James Hay would receive further assessments for one or both of the additional tax years which could be “materially higher” than its initial bills.

IFG says it will provide a further update to shareholders “in due course”.

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