Rates hikes ‘disincentive’ for businesses to expand

ANYA GREALY was looking to expand her small hotel in Roscommon two years ago. Despite it being a bad time for the tourism industry, she wanted to add 26 bedrooms to her Abbey Hotel and extend the conference and leisure facilities.

Factored into her business plan was an increase in local authority rates, which totalled €15,659 last year.

These were separate to water charges and waste charges, which she paid to a private waste collection firm. As she was expanding her property she was expecting an increase in rates.

She had expected that it would rise past €20,000 and even double to €30,000. The bill for the expanded property came to €56,081.

“This was impossible to forecast in our business plan, it was a 360% increase. This is now our second highest overhead after insurance.

“Where is the incentive for a business to expand when the rates rise by this much?” she asked yesterday at the launch of the Chambers of Commerce Ireland report on business rates charges.

According to Ms Grealy, who has run several hotels, it is not just the rate increases. The bill for planning and development levies ran into tens of thousands of euros.

David O’Mahony, proprietor of O’Mahony’s bookshops in Tralee and Limerick, says many business are being forced to consider where to locate because charges in some areas are more expensive than others.

“It is a disincentive to attracting a business to the area.”

Mr O’Mahony added that there “was no correlation between rates and ability to pay them.

“You can control your overheads and vary some costs like distribution and phone companies but we have no control over rates.”

Other business people are similarly annoyed. They said it was not the fact that rates are increased but the fact that local authorities are doing it without any notice and that there seems to be no change in service. They already pay water and waste charges separately.

As one businessman put it yesterday, a business will not risk going to court to have it reduced, so the county councils can continue to hike the rates.

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