COMHAIRLE CONTAE ÁTHA CLIATH THEAS
SOUTH DUBLIN COUNTY COUNCIL
MEETING OF SOUTH DUBLIN COUNTY COUNCIL
Monday, November 08, 2010
QUESTION NO. 18
QUESTION: Councillor B. Lawlor
To ask the Manager, if small businesses in the County would be allowed to defer payments on their commercial rates if they find that they are in serious financial difficulties?
Given that rates are one of the biggest single expenditures for any business, I would appeal to the Manager that an arrangement could be arrived at, where such businesses can defer their rates for a period of twelve months.
Ultimately no business in S.D.C.C should be forced to close its doors, because of rate arrears. In the same vain – businesses shouldn’t be forced to reduce employee hours or let staff go because of their liability to S.D.C.C.
REPLY:
The commercial rates bill as issued by the Council is based on the valuation provided by the Valuation Office which is the state agency charged with providing valuations for non-domestic property. The Valuation Office acts independently and liaises with property owners and occupiers when applying such valuations. The last review of valuation was carried out in 2006/2007 during the revaluation by the Valuation Office, of the rates base in South Dublin County Council’s administrative area. Properties were revalued with effect from the 1st of January 2008.The aim of the review was to bring more equity, fairness and transparency into the system.
Following the revaluation the only circumstance where a rateable valuation can be amended is if there is material change in the property i.e. an extension or reduction in the size of the property. This will require a revision of the valuation and is carried out by the Valuation Office. The Valuation Office can be contacted at Irish Life Mall, Abbey Street, Dublin 1 or on telephone number (01) 8171000 or their website, www.valoff.ie, has detailed information about the revaluation process.
The Valuation Acts govern the way that Rateable Valuations are calculated and maintained in the Valuations List by the Commissioner for Valuations. The Council is obliged to levy and collect Commercial Rates in accordance with legislation enacted by the Government. (i.e. the Poor Relief Acts and Local Government Acts). The Council has no flexibility in relation to changing the amount of the rates bill as the legislation does not allow for an adjustment to be made.
Rates are a property based tax levied by Local Authorities on the occupiers of commercial/industrial properties and in some cases, the owners of properties in their administrative area. This valued contribution by the commercial ratepayers is a vital component in the provision of services by this Council. Economic activity in South Dublin has increased considerably over the past 10 years. The strength and growth in the commercial sector is an integral part of the future development of South Dublin. The Council conscious of the current financial climate, decreased the rates by 2.34% .in 2010 .
Rates have contributed in 2010 to the provision of services in the areas of housing, road transportation and safety, water supply and drainage, planning and development, environmental protection, libraries, parks and community services and other services. Any shortfall in rates income affects the level at which the Council provides these services.
The Council has a number of methods of payment available, such as payment through our Cash Office, by Cheque, EFT Payment, Standing Order and Direct Debit. The Council is conscious of the difficulties some businesses are experiencing at present but under the legislation governing the collection of rates, the Council is duty bound to collect the rates due. Notwithstanding this, the Council has on occasion accommodated ratepayers with cash flow difficulties by entering into payment arrangements so that their rates and arrears are cleared within an agreed period of time.
A report published by Forfas in December 2008 noted that the cost of commercial rates represented on average between 1% and 4% of the annual operational costs for retail operations - the percentage varied within this range depending on the scale of the enterprise.
The table below has been extracted from this report which is available at the following link www.forfas.ie/media/forfas081222_retail_running_costs.pdf
| Figure 1: Operating Cost Profiles by Retail Format (Costs excluding the Costs of Goods) | ||||
| Convenience | Multiple | Department Store | Retail Park | |
| Number of Stores | 1 | 2 | 2 | 2 |
| Labour Costs | 54% | 37 - 60% | 46 - 49% | 32 - 35% |
| Property Costs (incl. Service Charges; Maintenance) | 32% | 16 - 18% | 25 - 28% | 26 - 29% |
| Transport and Distribution | 1 - 18% | 0 - 2% | 9 - 24% | |
| Utilities (incl. Water & Waste) | 11% | 6 - 9% | 3 - 5% | 4% |
| Security and Cleaning | 1% | 3% | 3 - 5% | 2 - 3% |
| Advertising and Marketing | 4 - 8% | 3 - 4% | 5 - 10% | |
| Local Authority Rates | 1 - 2% | 3 - 4% | 3 - 4% | |
| Other Business Services | 2% | 4 - 10% | 10% | 3 - 7% |
| Total Operating Costs | 100% | 100% | 100% | 100% |
| Source: Forfás, The Cost of Running Retail Operations in Ireland, Dec. 2008: 5 | ||||
| Note 1: Costs Exclude the Cost of Goods | ||||
| Note 2: Based on Survey of Dublin Businesses. |