Madam, – In the run-up to the election, politicians have mentioned commercial rates many times, because they are listening to the heartfelt pleas of struggling business owners. However, they do not appear to accept that it is the inequity of the system of levying rates that is the key problem.
The current method levies rates by valuation of premises rather than by turnover or profitability. This often means that businesses that require much smaller area from which to operate, pay much lower rates, yet some of these businesses enjoy much greater turnover and may not affected by seasonality. Neither does the current system take into account ability to pay. The result is that businesses are closing down.
The method of levying rates is not defined by local authority managers but by Government legislation The Valuation (Ireland) Act, 1852 is still the basis for valuation rating legislation. This system is derived from one that operated in England. In the 17th century it would have been impossible to rate personal property as well as real property and the practice was established of rating only real property and disregarding stock-in-trade. Surely in the 21st century where property is intellectual rather than measured in the square metre, the only fair and equitable method of levying commercial rates is by way of percentage of turnover, as is the case with VAT? – Yours, etc,
While landlords have reduced rent levels in all but the most intransigient of cases, there has been no relaxation or amendment to the rating system or the level of rates demanded.
It is now possible that in some locations, the rates are more expensive than the rent, which is putting traders in an impossible situation.