Businesses folding to avoid paying rates to City Council

 BY CIARAN TIERNEY

Some city businesses are deliberately shutting down only to reopen under new names in order to avoid paying rates to Galway City Council, a meeting of the local authority heard last night.

Although the meeting heard that the City Council managed to balance the books for 2012, it was alleged that some businesses were going out of their way to avoid paying rates by closing their doors and then reopening as “new” enterprises.

The report found that only 62% of rates due were collected by the City Council last year, with arrears of €17.1 million on December 31 last. This compared to arrears of €16.4 million on the first day of 2012.

A total of €45.6m was due for collection in 2012, but the local authority managed to collect just under €28.5m.

“I think some of these businesses are running rings around the local authority when it comes to rates,” said Cllr Padraig Conneely (FG). “Then they have the nerve to keep the premises open or to reopen their doors after just a few days.”

The City Council managed to balance the books for 2012 with a net surplus of almost €17,000, despite difficulties in collecting rates, rents, water, and domestic waste charges.

The local authority recorded a total income of €81,415,996 in the last calendar year, compared to an expenditure of €81,399,317.

In a report to last night’s meeting of the City Council, Head of Finance Edel McCormack said the 2012 results reflected successful efforts and actions taken to match expenditure with available funding and resources.

“Galway City Council has implemented prudent expenditure controls, strengthened debt collection measures and reviewed work practices and resource demands,” she said.

“It is imperative that the City Council continues this programme into the future in order to limit the impact of reduced resources on essential services.”

Only 59% of commercial water rates were collected during the year, leading to arrears of just under €2.7m at the end of 2012. A total of €6.5m was due for collection, with €3.8m collected during the calendar year.

The corresponding figures for rents and annuities were 76%, with arrears of €2.3m on December 31, while only 71% of the money due for domestic waste collection services (a figure of €2.3m) was collected during the year.

Ms McCormack said that income from the local government fund, the pay and display scheme, water, composting, and Leisureland were all below what was anticipated in the Budget for the year, while the Council’s waste collection service was “struggling to break even”.

Read more in today’s Connacht Sentinel