Element Six makes appeal on Revenue tax claim

THE Irish arm of industrial diamond manufacturer, Element Six is contesting a tax assessment by the Revenue Commissioners of a net €845,351 concerning alleged underpayment of taxes.

That is according to new accounts for the Shannon based Element Six Ltd which show that the company’s pretax profits increased by 51pc to $21.5m (€18.13m) last year.

The increase in pre-tax profit was chiefly as a result of dividend received of $11.13m. Revenues at the company declined by 4pc from $226.97m to $217.62m.

The company last year paid out dividends totalling $35m.

A note attached to the accounts states that it has received assessments from the Irish tax authorities of an underpayment of €1.34m for 2015 and an overpayment of tax of €500,000 for 2014 resulting in an alleged net underpayment of €849,351.

The firm does not consider it probable a significant liability will arise

The note states that management have submitted an appeal contesting the assessment and having taken expert advice from taxation specialists, the directors “do not consider it probable that a significant liability will arise”.

Numbers employed last year declined from 513 to 470 as staff costs fell from $37.5m to $34.6m.

According to the directors’ report, the main challenges were continuing to match supply to volatile customer demand particularly from the oil and gas industry “and managing the impact the slowdown in global automotive production numbers had on our machining business”.

On the impact of Covid 19, the directors state that the group has considered the potential increased risk as a result of the pandemic and do not expect it to have a material impact on the business.

The company’s operating profits declined by 33pc from $16.06m to $10.66m. The profit takes account of noncash combined depreciation costs of $12.9m. Directors’ pay reduced from $1.19m to $723,000.

At the end of December last, shareholder funds stood at $123.03m that included accumulated profits of $106m.