An employer has been ordered to repay €2.24m in Covid-19 wage supports to the Revenue Commissioners.
This follows the Tax Appeals Commission (TAC) finding that Revenue was correct in issuing the €2.24m assessment in July 2022 after the €2.24m in Employer Wage Subsidy Support (EWSS) was wrongly claimed by the employer from July 2020 to August 2021.
In addition in 2021, the employer claimed further EWSS payments for September, October and November 2021 totalling €355,364 and these payments were with-held by Revenue.
The Revenue Commissioners issued the €2.24m assessment after finding on the basis that the employer had failed to demonstrate that its business had expected or was expected to experience a 30% reduction in turnover or customer orders during the relevant periods during the pandemic.
The employer appealed the assessment to the TAC and now in a ruling concerning the €2.24m, Commissioner Simon Noone concluded that the employer applied the wrong comparative revenue test when seeking to justify its EWSS claims.
Mr Noone also concluded that the employer was not entitled to use figures calculated on a retrospective basis to claim for EWSS payments.
At the TAC, Revenue contended that the employer failed to carry out rolling reviews and that it had understated its turnover/sales figures for the relevant periods.
The Revenue Commissioners stated that when the employer's own sales figures were applied to the statutory test, the employer was ineligible for each month.
In initial figures provided, the employer recorded a turnover of €1.27m from July to December 2020 compared to a July to December 2019 turnover of €1.63m - a drop of 22pc.
In the period from January to December 2021, the company recorded revenues of €2.46m compared to revenues of January to December 2019 of €3.2m - a drop of 24.65pc.
Revenue stated that as the employer's figures failed to show a reduction of 30% for any of the 'specified periods’, "the appeal was doomed to fail".
Thirty six hours before the TAC hearing into the case, the employer lodged revised figures and Revenue stated that the employer had not only failed to carry out rolling reviews in real-time as required but it had submitted figures that were incorrect and had sought to claim it had an entitlement to EWSS payments on the basis of the wrong test.
Revenue stated that the approach of the employer to apply for EWSS payments for every month and then afterwards work out if it was entitled to them, was not in compliance with the statute.
At hearing, the employer lodged revised figures showing that it owed Revenue €1.09m in EWSS repayments, but was entitled to a further €1m for months not granted or claimed, leaving a ‘net liability’ of €84,951.
The figures carried out by the employer's agent were not based on contemporaneous rolling reviews but were calculated on an ex post facto, retrospective basis.
In his findings, Mr Noone found that even if the employer had used the correct comparative revenue test he could not allow the figures as they were based on a retrospective review of the employer’s accounts.
The TAC has confirmed that it has been requested to state a case for the opinion of the High Court in respect of the ruling.
Reporting by Gordon Deegan
