BP is hoping to reclaim what it says is overpaid tax of £300m, plus compensation, from ten years ago.
According to documents filed at the High Court, BP says HM Revenue and Customs (HMRC) wrongly charged it stamp duty reserve tax when it took over a US firm Atlantic Richfield (ARCO) for $26bn (£16.1bn) in 1999.
At the time, BP’s own lawyers advised it to pay the tax related to the transfer or issue of new American shares, but the oil major now says it misread the law.
BP had managed to avoid paying this tax through a legal loophole when it bought another US company, Amoco, for $60bn in 1998. However, the UK tax authorities closed off the loophole and by the time of the ARCO acquisition, BP was deemed liable to pay the tax because the transaction was in new shares.
