HMRC largely relents in VAT dispute with Oriole Resources

Africa and Europe-focussed exploration company Oriole Resources issued a “positive update” on its appeal against Her Majesty's Revenue and Customs (HMRC), on Tuesday.

The AIM-traded firm was asked to pay-back £0.56m in reclaimed value-added tax (VAT) last year, as it announced on 27 February.

It said HMRC had now accepted its activities in supporting its overseas exploration were an “economic activity” for VAT purposes.

The £0.56m provision made in the 2017 financial statements was expected to be “substantially released”, the board said, although a partial restriction would apply going forward in respect of the group's activity in Turkey.

It said the quantum of the partial restriction remained subject to ongoing discussions.

“We are pleased to have reached agreement with HMRC that the group's activities to support overseas exploration are an economic activity for VAT purposes,” siad chief financial officer Bob Smeeton.

“Whilst there are still ongoing discussions concerning the restriction relating to our Turkish activities, it is excellent news as a significant proportion of the 2017 provision is expected to be available for release in 2018.”