Barclays Plc will challenge in court a 181 million pound ($236 million) backdated value-added tax bill from the U.K. tax office.

The bank revealed its plan to take the tax dispute to court Feb. 21 in its 2018 annual report.

The disputed tax bill arose in March 2018 when Her Majesty’s Revenue and Customs (HMRC), the U.K. tax office, ejected several of the bank’s overseas subsidiaries from its U.K. VAT group and demanded the bank pay the tax that these companies avoided while they were members of the group.

Banks and financial services firms arrange inter-group services within “VAT groups” to significantly reduce their tax bill, because such services provided within the group are exempt from the tax.

The practice is widespread in financial service because much of the VAT is irrecoverable due to banking regulations.

Barclays decision to appeal comes as HSBC’s auditor PwC also admitted in the annual report earlier this week that HMRC’s crackdown on the VAT practices of financial services firms could lead to an increased risk of an uncertain tax bill for the bank.

Barclays will appeal the tax office’s decision at the First Tier Tribunal (Tax Chamber).

“Banks and financial services firms can use VAT groups to make services like IT that are supplied inter-group VAT-exempt, but HMRC has recently clarified that it believes for an overseas member of a VAT group to qualify they must make supply rather then just receive them,” said Antje Forbrich, partner and VAT director at Blick Rothenberg.

The U.K.'s Chancellor of the Exchequer Philip Hammond warned in his budget speech Oct. 29 that the government “will end the practice of purchasing services through overseas branches to avoid U.K. VAT.”

The changes, set for publication April 1, will take effect immediately and will mean firms can be liable for any tax they avoided while the branch was in the VAT group.