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Essar Oil in talks to extend January UK VAT payment deadline By Reuters

© Reuters. FILE PHOTO – The Essar logo is seen in Mumbai at the Essar group’s headquarters on August 21st 2017. REUTERS/Danish Siddiqui

(Reuters) – 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 https:// which said the company had used the government’s pandemic VAT deferral scheme last year.

Essar responded to a Reuters inquiry for comment and said it has already repaid HMRC 547million pounds of a total 770million pounds.

HMRC had offered Essar an expedited schedule to pay the remainder of the amount, but it was unable to comply due to the slower recovery from pandemic.

Essar told Reuters that the company is currently in talks with HMRC to extend its time frame for deferred VAT payments.

It said that the discussions were positive, and that EOUK was looking forward to a solution soon.

The company has returned to positive EBITDA, which is earnings before interest taxes depreciation, and amortization, and so it’s in a much stronger position to weather any future challenges posed by the pandemic.

Essar in May secured more than $850 million in financing for the Stanlow refinery after hitting short-term financial difficulties.

Stanlow is a company that employs more than 900 employees and has 800 additional contractors. They supply road fuel in northwest England and fuel for jets to Birmingham and Manchester 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.

($1 = 0.7311 pounds)

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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.