Essar Oil UK, the operator of Britain’s Stanlow oil refinery, is in talks with UK authorities over extending a January deadline to repay hundreds of millions of pounds in deferred taxes, the company said on Sunday.
Essar Oil said it still needed to pay 223 million pounds ($305 million) to HM Revenue & Customs (HMRC) by January, confirming an earlier report in the Sunday Times newspaper, which said the company had used the government’s pandemic VAT deferral scheme last year.
Essar, in response to a Reuters request for comment, said that it had already repaid HMRC 547 million pounds out of a total 770 million pounds.
The company had agreed an accelerated schedule with HMRC to make the rest of the payment, which it has not been able to meet due to a slower than expected recovery from the pandemic.
In a statement to Reuters, Essar said it is in discussions with HMRC over a "short extension” to make the deferred VAT payments.
"Those discussions are positive and EOUK looks forward to a resolution soon,” it added.
It also said that the company had returned to positive EBITDA (earnings before interest, taxes, depreciation and amortisation) and therefore is in a ”much stronger position to weather the continued challenge presented by the pandemic”.
Essar in May secured more than $850 million in financing for the Stanlow refinery after hitting short-term financial difficulties.
Stanlow, which employs 900 people directly and a further 800 contractors on site, supplies road fuel to northwest England, and jet fuel to Manchester and Birmingham airports.
Lengthy queues of vehicles have been snaking their way to gas stations in Britain where an acute shortage of truck drivers has led to fuel rationing in a number of garages and some pumps running dry, and prompted the government to consider issuing temporary work visas.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
