IFG Group  

IFG focuses on solving legacy issues as £0.5m set aside

IFG focuses on solving legacy issues as £0.5m set aside

The new chief executive of IFG Group, parent of James Hay, has identified the resolution of its legacy issues with HM Revenue & Customs as a key priority for the business.

Kathryn Purves, who became chief executive of IFG Group in April, said discussions with HMRC in relation to Elysian Fuels were ongoing but to date HMRC "has been unable to provide a detailed response or further clarity".

As a result, IFG was unable to make a provision for any exposure beyond the £1.3m of legal costs already provided for in its 2017 accounts, she said.

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Separately IFG has set aside a further £0.5m to deal with James Hay legacy issues "in relation to potential sanction charges and customer detriment during H1 2018", as part of an ongoing review.

Ms Purves took over at the helm of IFG after her predecessor, John Cotter, stood down when the board decided it wanted new leadership.

It came after the company looked into selling its advice business Saunderson House but aborted this process after deciding the offers it had received were "not wholly aligned" with the firm's strategy.

IFG Group has previously estimated that its total exposure as a result of the Elysian Fuels issue is £20m.

Elysian Fuels was sold as a scheme investing in renewable energy projects in the UK and the US, including in 2013 the launch of a bioethanol plant in Grimsby.

About £200m was invested in the scheme - which was marketed as suitable for experienced investors only, with a minimum investment of £50,000.

As much as £180m is believed to have been invested via Sipps, with provider Rowanmoor also having some clients with money in the scheme.

Ms Purves said: "The first four months of 2018 was a challenging period for IFG Group, with assessments from HMRC in relation to Elysian Fuels and the cancelled Saunderson House sales process. 

"Since April we have made good progress on identifying and implementing our near-term priorities; building two self-reliant businesses within an efficient group structure and resolving our legacy issues. 

"I am pleased to report that James Hay and Saunderson House have delivered robust results in the first half of the year."

She added: "Discussions are ongoing with HMRC in relation to Elysian Fuels to gain further information on our position. However, to date HMRC has been unable to provide a detailed response or further clarity. We continue to seek legal advice in order to reach an acceptable resolution with HMRC."

In its results for the first half of 2018, IFG Group saw its assets under administration and advice go up by 8 per cent to £31.3bn.

James Hay added 2,469 new self-invested personal pension (Sipp) clients during the first half of 2018, down 20 per cent on the same period last year which was driven largely by the slow-down in the defined benefit transfer market.

IFG Group swung into the black during the six month period, posting an operating profit of £1.4m, up from a loss of £100,000 in the same period in 2017.