Clare businesses could face 3.8% rates hike in 2022 Budget

CLARE businesses may be hit with a 3.8% increase in commercial rates, if local county councillors approve the first hike since 2009 in the Draft 2022 Budget at a meeting this Friday, writes Dan Danaher.

With Clare County Council’s overall expenditure projected to increase to €138.6 million in 2022, up €7.8 million on the previous year, it is expected this proposed rates increase will generate an additional €1.3 million in revenue, if it is approved.

The Clare Champion has learned that councilllors were presented with this proposed commercial rates increase at a recent briefing.

In total, 3,430 occupied properties generated €37.2 million in commercial property rates in 2021. Ten levied properties pay more than €20 million. This income comes from energy generation plants, windfarms, global utility networks, national retailers and large industry. The balance of about €17 million is levied across 96% of properties in the county.

While income from extra properties or new builds will generate an extra €1.15 million, this is offset by the delisting for commercial rates of the Roche plant in Clarecastle, a loss of €0.7 million, the successful application by ESB Networks on their global valuation, a loss of €62,000 and the delisting of other properties across the county where they are converted to domestic use.

In a report to councillors, deputy chief exectuive, Liam Conneally, stated in 2021, Covid-19 continues to impact the council with significant losses of income across a number of headings and incurring additional expenditure while maintaining services.

“The financial impact in 2021 on goods and services income and additional expenditure incurred is evident in the projected deficit outlined in this report of close to €5 million in 2021.

“At the time of presenting this report to council, there is no positive indications from central government of supports in 2021 for these financial losses experienced by the council.

“If no central government supports are announced for local government in the coming weeks, this council will return to a deficit position on its revenue account at the start of 2022.

“The draft budget is prepared on a number of assumptions that bring inherent risk into the 2022 budget year as in 2021.

“The main assumption is that there will be continued government support available to the council if the economy experiences the same impact as 2020 and 2021 into next year.

“This assumption centres on the council’s income from goods and services and commercial rates because the draft budget process could not bear that level of income shortfall without an obliteration of services.

“Draft Budget 2022 income from goods and services impacted in the areas of parking, tourism and leisure centres have been prepared at the same level as pre-pandemic levels,” he warned.

It is expected that senior council officials will emphasise that more than €40 million in business supports have been provided by the local authority to the commercial rates sector during the last 21 months.

There are also plans to introduce a scheme for the hospitality sector in 2022 where a 5% reduction is applied for those with a bill of more than €10,000 against the subsequent year commercial rates liability where the customer discharges their rates invoice in full in the year or is in an agreed payment plan to discharge their account balance by the end of 2023.

This scheme is an interim scheme for 2022 and 2023 only, in advance of the revaluation of this sector for commercial rates by the Valuation Office.

Draft Budget 2022 provides for a continuation of a single scheme for all small and medium enterprise businesses with a commercial rates liability of up to €10,000.

This proposed grant will provide for a 10% credit against the subsequent year commercial rates liability where the customer discharges their rates invoice by direct debit in the year.

According to the council, this scheme will potentially provide a 10% rates reduction to 87% of businesses in the county.

According to a briefing document obtained by The Clare Champion, the average increase for four of every ten occupied properties is €32 when a small and medium enterprise scheme of €85 is made available.

The average increase for a further 1.8 properties out of every ten occupied properties is €74 when a SME scheme of €195 is applied.

For a further two properties of every ten occupied properties, the average increase is €132 when a SME scheme of €347 credit is applied.

In the Ennis Municipal District for eight out of every ten ratepayers, the average increase is less than €130, for five of those it is less than €75.

In the Killaloe MD, an average of €131 applies to 88% of ratepayers, for seven out of every ten, the average increase is €75.

In West Clare, for nine out of ten ratepayers, the increase averages at €128 and €73 on average for seven of those nine.

In Shannon, for six out of every ten the average increase is €139, with four of those paying €74.

All of these ratepayers qualify for the 10% reduction on their commercial rates’ bill where they meet the criteria ofthe SME scheme.

Councillors will be tasked with adopting Budget 2022 with or without amendment, determine the annual rate of valuation, decide the proportion of rates refund applicable on vacant commercial properties; approve the small and medium business grant scheme, the 2022 Hospitality Scheme and the 2022 Vacancy Credit Scheme.

More than 3,300 properties claimed a total of €13,779,572 in a commercial rates waiver in 2020. The number of claimants fell to 2,028 properties in 2021 who collected a total of €11,533,501 in a waiver refund.

The 2020 Commercial Rate Waiver was for the period March 27 to December 27 inclusive. The 2021 commercial rates waiver period was from January 1, 2021 to September 30, 2021, and the eligibility criteria for both waivers were different.

The eligibility criteria for the fourth quarter commercial rates waiver from October 31 to December 31 was also different.