Stanlow oil refinery chiefs hold crisis talks with HMRC over £223m VAT bill amid fears of collapse

Britain’s second largest oil refinery is in trouble with tax officials amid fears that it is on the verge of collapse.

The owner of the Stanlow Oil Refinery in Elsmere Port, Cheshire, is in urgent talks with HM Revenue and Customs (HMRC) for over £223 million tub payment.

According to the Sunday Times, the refinery, which has been under financial strain during the Covid pandemic, needs to start paying the bill this week until a new deal is agreed upon.

Owned by the billionaire Ruia brothers, Shashi and Ravi, through their company Essar Oil UK, the refinery supplies one-sixth of Britain’s road fuel. It also supplies jet fuel to Manchester and Birmingham airport.

The refinery employs about 900 people directly and about 800 contractors also work on site.

It also comes as Britain faces a fuel crisis, closing petrol stations and panic after petrol chiefs announced they would have to shut pumps due to UK lorry driver shortages.

Refinery’s VAT bill made during the pandemic under the government’s Covid VAT deferral scheme.

The scheme, launched in March last year, previously allowed companies to defer VAT payments to help businesses stay afloat during the Covid lockdown.

But businesses were ordered to either refund the money by March 2021, join the interest-free installment scheme by June, or make arrangements with HMRC to refund the payments.

Essar Oil UK is said to have taken advantage of the £356 million scheme.

It entered into a time-to-pay (“TTP”) arrangement with HMRC for a total of £770million in April 2021.

The company says it has paid £547 million, leaving a balance of £223 million – which must be paid by January next year.

Payments are due to start this week. They coincide with the end of the government’s suspension on winding up petitions.

The company, however, says the economic recovery has been “slower than predicted” and therefore will not pay and was in talks to “revise that schedule”.

A spokesperson told MailOnline, “Therefore EOUK is discussing a brief extension with HMRC to make those deferred VAT payments.”

“Those discussions are positive and EOUK looks forward to a solution soon,” the spokesperson said.

Sources have reportedly told the Times that unless the refinery gets more cash, it is likely to go bankrupt and will be taken over by the official receiver to keep the refinery running.

According to the Sunday Times, a government bailout had already been rejected. Ernst & Young Global Ltd (EY) has also been brought in to advise the firm on what to do next, the paper adds.

HMRC and EY have also been contacted for comment, but have not sent a response in time for publication.

This comes amid panic following BP’s decision to close some of its stations due to supply chain issues affecting fuel to the pumps.

Meanwhile, more than 10,000 temporary foreign visas will be fast-tracked by the government as ministers race to solve the supply chain crisis that threatens Christmas.

5,000 HGV drivers and 5,500 poultry workers will be granted an extraordinary three-month visa, allowing them to work in the UK until Christmas Eve.

The move comes amid a nationwide panic race at petrol stations and growing fears inside Downing Street that supermarket shelves may be left barren by Christmas.

Transport Secretary Grant Shapps said the changes, with visas available from next month, would ensure ‘preparations are on track’ for the festive season.

But the Road Haulage Association made the announcement ‘barely scratching the surface’, while the British Chambers of Commerce said the measures were the equivalent of ‘throwing a drop of water on a bonfire’.

Retailers had warned the government that it had only 10 days to avoid Christmas from a “significant disruption” due to a shortage of about 90,000 drivers in the freight sector.

It comes as thousands of desperate drivers ignored the government’s pleas to block roads – with fears about the impact of permanent fuel shortages on the economy.

Furious motorists were seen fighting on Saturday as nationwide rush for fuel continued amid calls for peace from the government as less than 100 petrol stations were empty.

Shocking footage shows panicked shoppers punching and kicking each other during a violent brawl at an Esso Patrol forecourt in Sidlesham, Chichester, as roads were jammed and police had to marshal drivers Was.

Two men were seen scuffles before throwing punches at each other, while another enraged motorist launched a flying kick at the other man as a scuffle for fuel in the sleepy West Sussex village turned violent.

A shortage of HGV drivers has long threatened to wreak havoc this winter, and was exacerbated by a huge backlog in HGV tests due to COVID, as well as foreign drivers returning home amid the pandemic and Brexit Is.

Industry groups Food and Drink Federation and Logistics UK both welcomed the visa change, with federation head Ian Wright calling the measures ‘pragmatic’.

But Baroness McGregor-Smith, president of the British Chamber of Commerce, said the changes were ‘the equivalent of throwing a drop of water on a bonfire’, and that 5,000 new visas may be too little, too late, to stop the chaos.

Meanwhile, Mark Fels, director of the HGV Recruitment Centre, told BBC Breakfast the move was ‘too little, too late’.

He said: ‘Every additional driver coming into the sector at the moment is going to benefit.

‘But I think it’s too low, because the numbers coming out, 5,000, are not going to make a huge dent on the 90,000-100,000 that we think of as small.

‘And it is too late because we understand that these problems are coming in early April this year, so we are moving to October and only now the government is coming up with these solutions when it is an issue from April. Used to be.’