Support for businesses impacted by COVID 19 through commercial rates deferral

20th March, 2020

The Government has today  (20 March, 2020) agreed with local authorities that they should agree to defer rates payments due from the most immediately impacted businesses – primarily in the retail, hospitality, leisure and childcare sectors, for three months, until end-May.  This measure will be implemented by each local authority in its own area. 

Recognising that this flexibility will have implications for local authorities in terms of cash flow and critical service delivery implications, short-term cash flow support for local authorities will be made available. It will review the arrangements, as required.

The announcement was made by Ministers Murphy, Donohoe and Phelan today (20 March). Local authorities deliver critical services, including emergency response, housing, homelessness, parks and amenities and they are working with the HSE at national, regional and local level on the co-ordinated response to COVID-19.

Businesses around the country contribute €1.5 billion in commercial rates to local authorities every year. This is a critical source of income, making up between 16% and 53% of total funding for essential local services at individual local authority level, averaging 33% nationally.

Local authorities are working as part of the State’s co-ordinated response to dealing with the Public Health threat posed by COVID-19, while also helping to ensure that the impacts on communities, businesses and other stakeholders are minimised.

They are acutely aware of the potential issues faced by their ratepayers. In particular, in the first instance, businesses, such as those in the hospitality sector, small and medium retailers, leisure and childcare areas, have been identified as those that could be adversely affected.

The Government is engaging with business owners and representative bodies nationally, while each local authority is engaging with its ratepayers and representative groups, monitoring the impacts at this stage of the COVID-19 response and keeping the evolving situation under review.

Already, individual local authorities are dealing with difficulties experienced by rate payers on a case by case basis. They are taking account of business pressures at this extraordinary time in terms of collection of rates and enforcement, in the sectors most impacted so far.

While the identified types of businesses may be most impacted initially, local authorities are also conscious that there may be impacts on other categories of ratepayers as the impact of COVID-19 and responses evolve and are monitoring the situation closely.

Individual local authorities have a long-standing relationship with local businesses and are very well placed to deal with this evolving situation and its impact on ratepayers in their own local authority areas and operating environments.

Any commercial ratepayers that have had to temporarily close or significantly curtail operations during the COVID-19 response period should contact their local authority immediately in relation to any rates payments falling due in the period to end-May.  Ratepayers that can continue to pay their outstanding local authority rates should continue to do so in the normal way. 

Minister Murphy:

“The Government will support businesses while also making sure our local authorities continue their own vital services to the public. Today I can confirm that the most immediately impacted businesses will get a rate payment deferral. To facilitate this cash flow support will be made available to assist affected local authorities. I urge businesses to engage with their local authority so that they can get the supports they need in these incredibly challenging times.”

“Local authorities have always worked with ratepayers of all types and will continue to do so in these uncertain times. This can be achieved by balancing their obligations to levy rates with the vital need to support employment and economic activity. Local authorities will work with ratepayers that engage with them on flexible payment options and enterprise support, relevant to their circumstances. To those businesses that are facing financial problems: please engage with your local authority.”

Minister for Finance & Public Expenditure and Reform, Paschal Donohoe TD, said: “Small and medium-sized businesses are the lifeblood of towns and villages across Ireland. Right now, they are facing unprecedented challenges, not least of which is the speed at which some are feeling the impact and having to pull down their shutters. We want to make sure those shutters can come up again when the time is right. That is why we are announcing these measures today. For ratepayers fortunate enough to not have been impacted so far, or not impacted to date, it is critical they continue to contribute to national efforts to maintain the economy by continuing to pay rates. Local authorities will be more reliant than ever before on sustained contributions from those that can continue to pay.”

Minister Phelan: “Local authorities across the country have huge experience dealing with difficult situations and will work to help keep ratepayers afloat. Right now, some businesses just cannot pay these bills. Local authorities are already engaging with businesses in difficulty on a case-by-case basis. To support them in their crucial work, cashflow support measures will be made available for the local government sector. This will ensure they can work with struggling ratepayers in a constructive way.”