James Hay, the UK retirement wealth planning platform which is a subsidiary of IFG Group, has revealed that it is in a legal dispute with HMRC over some £1.8m of unpaid tax on biofuel scheme investments held by some of its clients in self invested personal pensions (SIPPs)
In a regulatory update, IFG said: ‘HMRC is investigating a non-standard investment known as “Elysian Fuels”, which was a structured investment in biofuel businesses initiated between 2011 and 2015, an equity component of which was held by some investors through their SIPP. Some of these investors are clients of James Hay.’
Around 500 of James Hay’s 57,000 clients invested a total of some £55m in Elysian Fuels. James Hay did not advise investors in relation to these investments, but acted solely as pension administrator. According to the announcement, in April 2017 James Hay received assessment notices for sanction charges from HMRC for the tax years 2011/2012 and 2012/2013 in total for £1.8m. These have been appealed and are the subject of ongoing discussions with HMRC.
IFG said: ‘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.
‘Sanction charges can be levied by HMRC on SIPP providers where there is deemed unauthorised payments, the amount of which is dependent upon the individual circumstances of each investor. ‘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.’
