More than one in six of the businesses that paid dividends to shareholders last year while also receiving State Covid supports have repaid some or all of the cash subsidies to taxpayers, according to figures supplied by the Department of Finance.
Revenue conducted a “short exercise” using dividend withholding tax (DWT) returns for 2021 to estimate how many businesses made shareholder distributions last year while on supports, and found 866 such companies had received €396 million of taxpayer assistance to pay their wage bills.
Revenue undertook the exercise following controversy over major companies, such as top building firm John Sisk & Co, which paid dividends to their owners in the same period they received taxpayer support. About 150 of them subsequently returned €37.3 million of the payments to the State.
Despite the cash raised following the Revenue investigation, the department says the exercise for 2021 will not be repeated this year as there were no restrictions on dividends attached to the near €10 billion in taxpayers cash handed out to help companies pay wage bills during Covid.
Figures supplied to Labour Party TD Ged Nash, in a parliamentary response from Minister for Finance Paschal Donohoe, also show that almost 40 per cent of businesses selected for State compliance checks for the Employment Wage Subsidy Scheme (EWSS) subsequently repaid some of their subsidies to taxpayers.
Out of 7,700 checks to see if employers were in compliance with the rules of scheme, more than 3,000 were found not to have been and subsequently returned €68.6 million to the State.
Just before the summer a further 42,000 of the 52,000 businesses that received EWSS payments were asked to do a final self-review of their eligibility for all the payments received. Following this, according to the response received by Mr Nash, 281 employers returned another €3.3 million.
Employers who wrongly availed of State wage supports can avoid interest charges on the cash to be repaid until the end of this month. Such debts to taxpayers can be “warehoused”, or deferred, for a period under a State scheme.
In all €336.2 million, or 3.4 per cent, of the wage subsidies paid out to employers has been repaid for various reasons, while 87 employers have asked to warehouse debts owed to the State.
Mr Nash has been heavily critical of the design of the wage subsidy schemes for not putting restrictions on the payments of dividends to shareholders. Mr Donohoe says the schemes were designed at the height of the pandemic to ensure staff were not let go, and he is satisfied with their performance.
Financial statements filed for certain businesses continue to show that many of them took taxpayers’ cash while rewarding shareholders. Last month, for example, accounts for family-owned chain of building materials suppliers Dublin Providers Limited (DPL) show it received more than €1.8 million in taxpayer Covid supports over the last two years despite making record profits and boosting the pay of its top executives by almost 60 per cent last year.
