AN ELECTRICITY COMPANY has announced an agreement with HM Revenue & Customs that will result in the release of £180m for the business.
The Drax Group announced that £117m that had been ringfenced to pay tax on the interest of a Eurobond financing structure that was put in place after it bought the Drax power station in Yorkshire.
The company had originally believed that there would be no tax to pay on the interest, but HMRC draft legislation in 2008 updated the rules on the tax relief. This meant that Drax had to change the financing structure and ringfenced the money subject to the agreement with HMRC.
It also announced that £63m earmarked for future years was also going to be released.
Tony Quinlan, finance director at Drax, said: “We are delighted to have brought these complex matters to a conclusion. We would like to thank HMRC for their professionalism and commitment which has allowed an efficient resolution to this process.”
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