Anyone who fails to submit the final statement of account for coronavirus aid received by the deadline must expect to be required to repay the funds in full. The Düsseldorf Administrative Court has confirmed this in a recent judgement and dismissed the claim brought by the owner of a beauty salon (Düsseldorf Administrative Court, court order of 23 June 2026, ref. 16 K 11153/25).
What had happened?
The owner of a beauty salon had applied for and been granted November and December relief totalling around 5,700 euros in early 2021. The payment was made subject to a subsequent final settlement. However, in March 2024, her independent third party – that is, the tax adviser who was due to submit the final settlement on her behalf – passed away. An administrator was appointed.
Despite the deadline being extended to 30 September 2024 and an explicit reminder setting a grace period until December 2024, no final statement was received. The Düsseldorf District Government subsequently demanded repayment of the total amounts paid out, plus interest. It was only after the recovery notices had been issued that the claimant informed the authority of the tax adviser’s death.
Why did the lawsuit fail?
The court dismissed the claim on several grounds. The decisive factor was that the claimant had failed to bring the special circumstances relating to the deceased tax adviser to the attention of the authorities in good time. Almost eleven months elapsed between the expiry of the extension period and the issue of the notices, during which time neither the claimant nor the practice liquidator contacted the authorising authority.
From a legal point of view, this is a key issue: a public authority can only take into account circumstances of which it is aware. Anyone wishing to invoke specific personal or organisational difficulties must before submit their arguments before the decision is issued, not afterwards.
Furthermore, the November and December assistance is a so-called ex gratia payment, to which there is no legal entitlement. The authority has a wide margin of discretion in this regard, which the court can review only to a limited extent. The attribution of fault to the practice liquidator was also clear, as she had legally succeeded to the position of the deceased tax adviser.
What remains to be done?
The judgement is final, as the claimant appears to have filed neither an appeal nor a request for an oral hearing. It is a first-instance decision handed down by a single judge, which is not binding on other courts. A ruling by the Federal Administrative Court, the highest court in this matter, is still pending.
The question of whether interest should have been waived for the period between the expiry of the deadline and the issue of the decision also remains open. The court did not give a definitive ruling on this matter, which may constitute a separate ground for challenge in similar cases.
What does this mean for those affected?
- Anyone who still has an outstanding final statement should act immediately and contact the funding body, even if the deadlines have already passed.
- Exceptional circumstances, such as the tax adviser being unavailable, must proactive and at an early stage be communicated to the relevant authority.
- In the case of a recovery notice, it is worth checking the interest rate separately.
- Anyone who receives a court order should consider whether it would make more sense to apply for an oral hearing rather than to apply for leave to appeal.
- Claims for damages against the tax consultancy firm or its professional indemnity insurance can have significant financial implications.
According to the Federal Government, the processing of final statements is expected to continue until 2027. Notices of recovery will continue to be issued on an ongoing basis. Anyone who receives such a notice should seek legal advice without delay.
Source: Haufe: Tax
This article was created with the help of AI and has been editorially reviewed.
