IntegraFin Holdings plc HMRC VAT Notice (0137A)
September 20 2022 - 7:45AM
UK Regulatory
TIDMIHP
RNS Number : 0137A
IntegraFin Holdings plc
20 September 2022
IntegraFin Holdings plc
HMRC VAT Notice
For Immediate Release 20 September 2022
IntegraFin Holdings plc
HMRC VAT Notice
IntegraFin Holdings plc ("IHP") issued a RNS on 21 June 2022
concerning HM Revenue & Custom's (HMRC) decision that
Integrated Application Development Pty Ltd ("IAD")'s membership of
a UK value added tax ("VAT") group is terminated with effect from 4
July 2016. The consequence of the exclusion of IAD from the UK VAT
group is that the services provided by IAD would be subject to VAT
which needs to be accounted for under the reverse-charge mechanism.
Integrated Financial Arrangements Ltd (the "Company"), a subsidiary
of IHP, requested a second, independent, review of HMRC's
decision.
Today the Company received notice from HMRC that it had
completed this second review and is upholding its original
decision.
Having taken legal advice, the Company now intends to appeal
HMRC's decision to the First-tier Tribunal (Tax Chamber).
Prior to appealing the decision, the Company is required to pay
HMRC the VAT that has been assessed as being due since 4 July 2016.
The VAT due for the period 4 July 2016 to 30 September 2021 is
GBP8.0m. The VAT due for the financial year ending 30 September
2022 is GBP1.8m. The payment to HMRC of VAT due will come from
Group cash reserves. As at 31 March 2022, we disclosed total Group
consolidated corporate cash on the IHP balance sheet of GBP177.8m,
including an amount of GBP51.6m not allocated to regulatory
requirements, risk appetites, taxation and dividend payments.
Therefore, after the payment to HMRC, we will continue to hold
extensive Group cash reserves.
Pending the outcome of the appeal there will be an ongoing VAT
liability (accountable under the reverse-charge mechanism) which we
estimate to be GBP2.4m for the financial year ending 30 September
2023. The VAT charge projection is based on the assumption that
staff recruitment continues in the way that we previously
announced.
If the Company's appeal is successful, all VAT payments detailed
above will be repaid with interest.
IHP had previously disclosed in Note 36 to its financial
statements for the year ended 30 September 2021 a contingent
liability for the potential payments to HMRC.
In accordance with required accounting treatment, IHP will now
include in its financial statements for the year ending 30
September 2022 a charge to its Statement of Comprehensive Income
for the full amount of the VAT amount due since 4 July 2016
(GBP9.8m). Additionally, IHP will also make a provision in its
financial statements for the year ending 30 September 2022 for the
calculated interest payable to HMRC, which would need to be paid if
the appeal is not successful. We estimate that this provision
amount will be GBP0.8m for the period from 4 July 2016 to 30
September 2022.
We will make further announcements about any material
developments as the appeal process progresses.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014 (WHICH FORMS PART OF
DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT
2018 ("EUWA")) ("UK MAR")
LEI Number: 213800CYIZKXK9PQYE87
Enquiries
Luke Carrivick - IHP Head of Investor Relations +44 (0)20 7608 5463
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END
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