Integrafin had requested a review of HMRC’s decision but yesterday the tax collector said it would uphold its original decision.

The company said it refutes the “contents of the findings of HMRC and now intends to require a review by an HMRC officer not previously involved with the matter”.

Integrafin has said that should the decision by HMRC be upheld, the VAT due for the period 4 July 2016 to 30 September 2021 would be £7.9m.

The potential VAT due for the financial year ending 30 September 2022 would be £1.9m. There would also then be a potential ongoing annual VAT charge if HMRC is successful.

The VAT is related to internal charging mechanisms within the Integrafin group and is expected to have no bearing on adviser or client fees.

The company was first hit with an unexpected £4.3m VAT bill in January 2020. 

In 2020 Integrafin received notice from HMRC about VAT paid by one of its companies: Australian-based Integrated Application Development Pty Ltd (IAD). HMRC said IAD's membership of a UK VAT group would be terminated with effect from 16 July 2016.

IntegraFin said that the consequence of the exclusion of IAD from the UK VAT group is that the services provided from Australia by IAD would be subject to reverse-charge VAT from 2016 onwards.

IntegraFin said it included IAD in the UK VAT group having taken “specialist advice” prior to its IPO in 2018. It followed that advice to ensure that the inclusion of IAD's branch in the UK VAT group was in accordance with relevant laws.