James Hay says it is committed to working with HM Revenue & Customs over a tax charge related to a biofuel scheme that could reach £20m.
A trading update released this morning by James Hay parent IFG Group says the “potential resolution” of the biofuel scheme tax charge that saw it shell out £1.6m in legal and remediation costs remains ongoing.
If the matter is still unresolved by March, the group confirmed James Hay will receive further assessments for one or both of the additional tax years which could be “materially higher” than the initial two years reflecting the volume of business incepted.
It confirms the maximum potential sanction charge for the overall 2011 to 2015 period could be around £20m, “assuming all Elysian Fuels shares are deemed valueless at inception, and no underlying clients discharge their own tax liabilities”.
IFG was initially contacted about the non-standard investment scheme, Elysian Fuels, 10 months ago after £55m from the Sipps of more than 500 James Hay investors had already been placed in the scheme.
IFG chief executive, John Cotter says: “Our desire is to bring closure to these issues as soon as possible and we will provide further updates as matters develop.”
An HRMC levy charge on James Hay of £1.8m for tax years 2011/2012 and 2012/2013 has previously been appealed.
Also within the trading report, the group confirmed an underlying claim relating to a legal action in Jersey regarding indemnities in respect of the 2012 sale of the IFG’s international division has been settled.