James Hay could be facing a tax penalty of £20 million over the biofuel investment Elysian Fuel.

The news was announced today by parent company IFG on the Stock Exchange.

IFG said it was confident, based on legal advice, that the outcome at tribunal or any settlement with HMRC would be “substantially lower than the maximum potential sanction charge” - £20m. This would be fundable from company cash resources, it said.

IFG said: “The potential exposure remains uncertain and is expected to remain so whilst discussions with HMRC and/or any Tribunal proceedings continue.”

Legal and remediation costs are relating to James Hay's inception of Elysian Fuels investments between 2011-2015.

The Stock Exchange announcement stated: “James Hay received notices of assessment arising from Elysian Fuels for tax years 2011/2012 and 2012/2013 totalling £1.8m, which have been appealed, and our discussions with the HMRC seeking an acceptable potential resolution of James Hay's inception of Elysian Fuels investments over the overall 2011-2015 period are on-going.

“If the matter is not resolved by the end of March 2018, James Hay would expect to receive further assessments for one or both of the additional tax years. Such further notices of assessment could be materially higher than the initial two years reflecting the volume of business incepted.

“James Hay is committed to working collaboratively with HMRC to resolve this matter and will continue to do so. However, if assessments are received James Hay will apply to HMRC for the assessments to be discharged and pursue appeals to the Tax Tribunals as necessary to protect its position.

Today’s report stated that James Hay has added more than 6,000 new clients in 2017, an increase of over 30% compared to 2016 and has £25.5bn assets under administration (2016: £22.1bn).

Meanwhile, IFG also announced that its Chartered Financial Planning firm Saunderson House, which advises on £5.1bn of clients' assets, is up for sale.