- Property tax policy decisions should be made by Oireachtas, not Valuations Office.
- ISME has campaigned vigorously for three years on the commercial rates issue.
- Fuel Sales, Shop Sales, Car Wash Sales and Non-forecourt buildings are now reckonable for the purpose of calculation of commercial rates on forecourts.
- Including fuel excise, the NORA levy and VAT, the cost of the typical litre of petrol or diesel is actually 60% or more tax.
- To include fuel and retail sales for the purpose of rate revaluation is arbitrary, unfair, and unlikely to withstand legal challenge.
The Government has taken its eye off property taxes for the last number of years,allowing officials in the Valuations Office to make what amount to policy decisions; decisions which should be made properly by the Oireachtas.
Local Property Tax has been allowed to wither on the vine, with no revaluation of properties since 2013, and more than 60,000 properties built since then not subject to tax at all. ISME has campaigned vigorously for three years on the commercial rates issue, having been advised that the Valuations Office were carrying out local revaluations. What the Valuations Office have never advised clients is that the entire basis of valuation has been arbitrarily changed for certain businesses, without notification or negotiation.
The difficulty has arisen because forecourt operators are being advised that Forecourt Sales, Shop Sales, Car Wash Sales and Non-Forecourt buildings or ancillary accommodation (yard, workshop, showroom etc) are now reckonable for the purpose of calculation of commercial rates. This might be tolerable if a similar calculation methodology was being applied to other retail premises, but they are not. Other retailers are subject to rates based on the physical footprint of premises, not on gross sales.
What is even more objectionable about the Valuations Office approach to forecourt operators is that fuel sales already incorporate a massive tax component.Because of fuel excise, the NORA levy and VAT, the cost of the typical litre of petrol or diesel is actually 60% or more tax. Retailers generally take no more than a 4% to 5% margin on fuel sales.
It is completely unacceptable that sales of any form are used for the purpose of rates calculation. Sales tax is levied via VAT. This shows a fundamental lack of commercial awareness by the Valuations Office. To include fuel and retail sales for the purpose of rate revaluation is arbitrary, unfair, and unlikely to withstand legal challenge.
Therefore, unless the Government intends to announce the inclusion of sales figures in the rates revaluations for department stores, offices, private hospitals, retail warehouses and supermarkets, valuations for forecourts must revert to an area-based formulation.
ISME’s pre-budget submission 2020 is available here.
ISME recommends that all businesses who have an issue with the rates revaluation communicated to them should call the Valuations Office on (01) 8171033, or email them at [email protected]
- ISME should be referred to as the Irish SME Association
For further information, please contact ISME offices T: 01 6622755 E: [email protected]