State paid out almost €1bn to waive rates for 121,000 businesses last year

About 121,000 businesses across the State had their local authority commercial rates waived between March and December last year due to the impact of Covid-19 lockdown restrictions in a move that cost the exchequer almost €1 billion.

The waiver scheme has been extended to cover the first quarter of this year, with an estimated additional cost to the State of €160 million.

The Department of Local Government has confirmed the rates were permanently waived for affected businesses, and that they will not be expected to repay them at a later date.

Commercial rates are the single biggest source of income for local authorities, delivering 29 per cent of projected current income in 2020.

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Prior to the Covid-19 outbreak, it was estimated that local authorities would collect €1.7 billion in rates last year from about 150,000 commercial and industrial properties liable for payment.

Business disruption

A full waiver of rates was introduced by the Government for a nine-month period to help businesses forced to close due to the pandemic, as well as those that experienced “significant negative economic disruption” from public health restrictions.

The waiver applied to most businesses, although a number of categories were excluded, such as those that suffered little or no economic hardship. An extension of the waiver for a further period of three months in 2021 has been agreed by Government.

In response to queries from The Irish Times, the department said the rates waiver had been applied to about 121,000 ratepayers last year – roughly 80 per cent of rate-paying businesses.

Initially, €600 million was allocated to local authorities by Government to fund the cost of the waiver, with a further €300 million subsequently set aside.

The department said it has so far paid out about €730 million to local authorities, with a further payment in respect of 2020 due in the coming weeks.

It said any underspend in the €900 million allocation would be used to cover other expenditure and/or income losses arising from the pandemic.

Dublin waivers

In Dublin, more than 36,000 businesses had their rates waived across four local authorities, which received a total of €343.9 million from central Government to fund the gaps.

Dublin City Council said 18,783 businesses were granted a waiver, while 13,742 paid their rates in full. The council said it received €159.5 million from the Government to bridge the gap. Its rates charges last year amounted to €358 million.

Dún Laoghaire-Rathdown County Council said its rates totalled €89.4 million last year. Some 4,900 accounts had the waiver applied at a cost of €44.5 million to the Government.

Fingal County Council said its commercial rates for 2020 came to about €148 million, of which €81 million was waived for about 5,800 businesses and recouped from the Government.

South Dublin County Council said its commercial rates for the year amounted to €131.5 million. Some 6,741 companies were granted a waiver at a cost of €58.9 million, which was, again, recouped from the Government.