Local businesses play a vital role in supporting local authorities to deliver critical services to their communities. Commercial Rates, at c€1.5bn per annum, make up roughly one third of local government current income. The Local Government Rates and Other Matters Act 2019 was enacted earlier this year, in order to modernise and improve the rates system for ratepayers, local authorities and local communities.
The rates paid by individual rate-payers is a factor of the valuation carried out by the independent Commissioner for Valuation and the Annual Rate of Valuation (ARV), decided by local authority members. The Government has consistently encouraged local authorities to show restraint in terms of ARV increases, in order to support local businesses, and local authority members have generally responded very positively.
The Commissioner for Valuation is currently conducting a national programme of revaluation to provide consistent, up-to-date valuations so that rates are equitably distributed. The purpose of revaluation is not to increase the overall rates take and therefore after a revaluation of a local authority area the Minister may set a Rates Limitation Order to ensure that the overall rates collected in the area doesn’t increase beyond normal inflation.
To date, revaluations have been fully completed in 16 local authorities, a further 8 are being completed and the final tranche should be completed by 2021. At all stages of the process, ratepayers are consulted and informed and can bring relevant information to bear on the valuation. Ultimately ratepayers have a right of appeal to the independent Valuation Tribunal. Interestingly, in terms of revaluations to date, I understand that the trend is that approximately 60% of ratepayers have experienced a decrease.
Where ratepayers have legitimate issues in paying their rates liability, local authorities will work with them to facilitate flexible payment options that reflect capacity to pay. The 2019 Act will further facilitate this flexible approach once ratepayers engage with the local authority. Importantly, the 2019 Act also provides for new Rates Vacancy Abatement and Rates Alleviation schemes, to be decided by local authority members in order to promote national and/or local policy objectives. This will add to the suite of options already available to local authorities to support local businesses and rate-payers.