HMRC surrenders £1.2bn ‘meths’ duty

HMRC has given up on a £1.2bn ‘meths’ duty from BP after a Gordon Brown
decided it would be ‘oppressive and unfair’ to penalise the oil giant for
breaking outdated regulations on a product that makes industrial methylated
spirits undrinkable.

According to The Daily Telegraph Brown approved the write-off after
a Treasury and NAO investigation into whether BP, the only producer of the
ethanol-based product, had attempted to evade paying tax over a four-year

HMRC chairman Sir David Varney was then given the go-ahead to write-off the
amount in the HMRC’s accounts for 2004-2005.

HMRC uses a formula covering the additive, and investigated the case when it
emerged that BP was manufacturing industrial meths to a formula different than
specified in the legislation. This resulted in the formula used not being
eligible for exemption from the spirits rate duty.

BP said the issue was a technicality and maintained that it had been open
about its conduct with HMRC.

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