Essar Oil in talks to extend January UK VAT payment deadline

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.

Essar Oil UK, the operator of Britain's Stanlow oil refinery, is in talks with UK authorities overextending 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 https://bit.ly/39AwwmG, 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 of 770 million pounds. The company had agreed to 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 the UK 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 amortization) 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 https://www.reuters.com/business/energy/essar-oil-uk-agrees-850-million-financing-2021-05-21 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 https://www.reuters.com/world/uk/behave-normally-uk-transport-minister-tells-britons-queuing-fuel-2021-09-26 have been snaking their way to gas stations in Britain where an acute shortage of truck drivers has led to fuel rationing in several garages and some pumps running dry and prompted the government to consider issuing temporary work visas.

($1 = 0.7311 pounds)

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