Nearly two and a half years after major problems regarding vapour recovery were first raised with the Government and HM Revenue & Customs (HMRC), a Treasury minister has finally agreed to meet representatives of the PRA.

Chairman Brian Madderson and taxation expert Alan Powell are scheduled to meet the recently appointed economic secretary Nicky Morgan on December 17.

Top of the agenda, said Madderson, will be the retailer-funded Barlow Powell Report, which was published in mid 2011. It looked into the issue of vapour recovery and how oil companies were being given tax credits for vapour lost during delivery, when the fuel, and therefore the vapour lost from it, had been paid for by retailers, and was therefore their property.

The report, which was verified by legal experts, found that HMRC’s supervision of vapour recovery was “unlawful and unjustly enriches the suppliers from the public purse”. Madderson said: “The average independent forecourt could be overcharged by £6,000 a year for fuel that has not been physically received due to the measurement / vapour recovery issue. “

He said HMRC took months to respond when it was first sent the report, and then a meeting was unsuccessful, so PRA tried to engage with the economic secretary at the Treasury, who has responsibility for duty issues. Over nearly two years successive Treasury secretaries claimed to have lost copies of the reports and correspondence sent to them by the PRA, but finally, after Nicky Morgan was appointed on October 7, a meeting has been arranged.

Madderson said that as the minister was a lawyer she would have a clear understanding of the legal implications of the report, and it was hoped there would be a swift correction to HMRC’s procedures.

In addition to vapour recovery the PRA also wants to impress on Morgan the situation with duty deferment. Madderson said HMRC appeared to trying to obstruct the duty deferment process and he would be calling for government intervention so legitimate applications from retailers would be approved.

A third issue to be raised with the minister is moving the duty point to the forecourt. One retailer is currently being supported by PRA in a court case against HMRC on this issue. Madderson said: “This would regularise the entire fuel supply chain up to the pump (neutralising the tax) - including the elimination of apparent wet-stock losses/vapour recovery problems.”

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