PRA member wins tax appeal

A Petrol Retailers Association (PRA) member has successfully appealed via the First Tier Tax Tribunal against HM Revenue & Customs (HMRC) imposition of unreasonable conditions, to obtain an excise duty Deferment Account Number (DAN) for Oil Products.

Brobot Petroleum Limited, a PRA member and family-owned company in the Midlands with 23 filling stations, has been fully approved by HMRC under the Excise Payment Security Scheme (EPSS) in 2013. The scheme was introduced by government in 2007, specifically to enable small and medium sized businesses to defer excise duty for up to 31 days with nil security

Deferring the fuel duty provides a number of significant benefits to the independent retailers which include:

• Credit on the duty payable to HMRC extended to the full length (up to 31 days) for the appellant
• Elimination of charges held by suppliers against some of the appellant’s properties as a condition of a shorter period of credit
• Elimination of excise bad debt for the supplier

Brian Madderson, PRA chairman comments, “The PRA has provided active support at the tribunal with our witness statement being cross-examined.

“We feel that the ability to buy fuel under duty deferment arrangements would also eliminate most of the conditions that lead to apparent stock losses on each and every delivery of fuel from suppliers.

“HMRC should have been intervening to prevent such losses but have failed in their duties to retailers, hence the importance of this decision.”

Since 2001 over 4,000 independent retailers (60 per cent of the total) have been forced to close their businesses largely due to financial pressures. It is likely that we will continue to see at least 150 cease trading this year.

Madderson continues, “This ruling should help many to stay in business by improving cash flow, increasing fuel stock levels, reducing costs and becoming more competitive.

“The PRA believes that a more robust and sustainable independent fuel retailing sector is vital for the UK economy and energy resilience.”