James Hay parent IFG Group has paid £1.6m in legal and remediation costs to date over an HM Revenue and Customs investigation into a biofuel scheme bought through the platform.
HMRC first contacted IFG in April over a non-standard investment scheme known as Elysian Fuels, which had attracted around 500 James Hay investors, placing around £55m in the scheme through their Sipps.
HMRC attempted to levy a charge on James Hay of £1.8m for the 2011 /12 and 2012/13 tax years, which James Hay appealed.
In its half year results this morning, IFG says it is in “ongoing dialogue” with HMRC but could not be certain when a settlement would be reached.
The firm noted that “substantial resource” had been given to a review of legacy products, including its non-standard investments, and that the firm’s insurance may cover some of the legal costs incurred.
The results read: “The legacy issue in James Hay, Elysian Fuels, is complex and the extent of any exposure to the group is uncertain at this stage, and hence has not been provided for, except in relation to known legal and remediation costs which have been incurred.”
James Hay banned non-standard investments including overseas commercial property, storage pods and carbon credits to be bought through its platform in January, but said it would continue to serve clients’ existing investments.
Speaking to Money Marketing, IFG chief executive John Cotter says that non-standard investments are a “very small component” of the firm’s business.
He says: “Just to be clear we have not turfed anyone off the platform and we are continuing to support them.”