REG - IntegraFin Holdings - HMRC VAT Notice

Integrafin HoldingsAnnouncement

20/09/2022 14:00

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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 £8.0m. The VAT due for the
financial year ending 30 September 2022 is £1.8m. 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 £177.8m,
including an amount of £51.6m 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
£2.4m 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 (£9.8m). 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 £0.8m 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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