Platform to appeal charge for non-standard investments held in Sipps
James Hay parent IFG Group has revealed that it is in a legal dispute with HM Revenue and Customs around unpaid tax on biofuel scheme investments.
Through Sipps provided by James Hay, around 500 clients put £55m in Elysian Fuels, whose investments included a bioethanol plant in the US and a renewable fuels refinery in the UK.
While James Hay did not advise investors and limited its role to pensions administration, a trading update released this morning says that, last month, it was sent sanction charges by HMRC totaling £1.8m for the 2011/12 and 2012/13 tax years.
James Hay has launched an appeal against the charges.
The trading update reads: “The extent of any ultimate exposure to the Group is uncertain at this stage, and may in any event be mitigated by indemnities available to us…We believe James Hay acted appropriately and in accordance with its clients’ instructions in relation to these investments. We will be incurring ongoing legal costs in relation to this issue.”
James Hay banned non-standard investments including overseas commercial property, storage pods and carbon credits from being bought through its platform in January.
In the update covering its results for the first quarter of 2017, IFG says assets under administration and advice across James Hay and its financial planning business Saunderson House were up 5 per cent to reach £28bn.
James Hay’s assets ticked up slightly from £22.1bn to £23.3bn, while assets under advice at Saunderson House increased from £4.6bn to £4.7bn after it added 86 new clients in the three months to March.
James Hay says, having taking a £1.6m hit on revenue and profit in the first quarter of 2017 from last year’s base rate cut, pricing changes and investment spend would result in “much-improved” performance for the second half of the year.
In March, James Hay announced it would increase charges for its lowest investment tiers and reduce fees for the higher band by 0.04 percentages points.
IFG Group also added it would close its Dublin support office at the end of the month, moving back-office staff to London.