Revenue to check businesses are not misusing Covid wage subsidy scheme

Tax authorities are contacting every employer who has availed of the Covid-19 temporary wage subsidy scheme as part of a compliance programme to ensure it has not been misused. Revenue is checking to see if companies are correctly claiming under the scheme, which has cost the State €1.59 billion up to last week.

The clampdown comes just as large swathes of the economy are reopening for the first time since a lockdown was imposed in March to prevent the further spread of coronavirus. Daryl Hanberry, a tax partner at Deloitte, described the timing as “unfortunate”.

“It is very unusual that every company would be asked to respond to a letter or questionnaire by Revenue,” he said. “ And the timing, just as those employers, largely small and medium businesses, are reopening and will be focusing on the health and wellbeing of their staff and customers, is unfortunate.”

Companies have just five days from the date of the letter to respond. Failure to do so will lead to the potential suspension of payments, Revenue has warned. Some 1,300 letters were sent electronically on Monday, with Revenue saying the process will take a number of weeks.

More than 61,000 companies have tapped the scheme under which Revenue subsidises up to 85 per cent of pay for employees of companies at risk of having to cut jobs due to the impact of the virus. Sums up to €410 per person a week are being paid, depending on payroll.