A construction services firm that more than tripled its revenues during Covid-19 must pay back €462,598 in State Covid-19 wage subsidy supports it received during the pandemic.

This follows the Tax Appeals Commission (TAC) upholding a Revenue Commissioners assessment concerning the firm's participation in the Employment Wage Subsidy Scheme (EWSS).

Revenue issued the assessment for September 2020 to July 2021 and October 2021 on the basis that the firm had failed to demonstrate to Revenue that its business had expected or was expected to experience a 30% reduction in turnover or customer orders during the pandemic in order to qualify for Covid-19 wage subsidy supports.

From September 2020 to October 2021, the firm applied for €577,424 in EWSS payments and received €462,598.

The amounts paid to the firm in EWSS payments ranged from €20,367 in September 2020 to €61,063 in October 2021.

All of the firm’s work is labour and during the pandemic it employed 100 and worked with three companies.

The numbers employed have since increased to 115.

In his determination, Commissioner, Simon Noone noted that the firm’s revenues had increased during Covid, rising from €464,101 in the 12 months to the end of September 2019 to €1.6m in the 12 months to the end of September 2021.

Mr Noone commented that given that the clear reason for the introduction of the EWSS was to assist employers who had suffered a significantly negative impact on their businesses due to the imposition of Covid-19 restrictions, "the Commissioner considers it surprising that the Appellant considered that it was entitled to subsidy payments under the EWSS."

Mr Noone found that the firm "improperly misallocated certain customer orders from 2020 to 2019, and from 2021 to 2020, in order to support its participation in the EWSS".

He said that when these customer orders were re-allocated, Revenue calculated that the firm had experienced a decrease in customer orders of 17.5% for the July – December 2020 period, an increase of 78.25% for January to June 2021, and an increase of 99.2% for January to December 2021.

Revenue argued that the firm had artificially adjusted its customer orders to move figures from 2020 to 2019.

In cross examination, it was put to the secretary of the firm and its accountant that the firm had allocated invoices for 2020 to 2019 thereby increasing the turnover for 2019 and reducing the turnover for 2020.

The witness replied that this was done because the firm decided to use customer orders rather than turnover as its basis for claiming EWSS.

The witness accepted that the turnover of the firm increased "a little bit" from 2019 to 2021.

The witness also rejected a contention that a number of invoices examined were a fabrication and included to massage the firm's figures for the purposes of its EWSS appeal.

- reporting Gordon Deegan