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Who pays business rates?


  • Steve Bond

    () (Institute for Fiscal Studies and Nuffield College, Oxford)

  • Kevin Denny

    (Institute for Fiscal Studies and University College Dublin)

  • John Hall

    (Institute for Fiscal Studies)

  • William McClusky


Non-domestic rates are a tax that is formally levied on the occupiers of nondomestic property in the United Kingdom. This does not imply that it is only the occupiers of business and other non-domestic property who are made worse off by the imposition of ‘business rates’. Some or all of the effective burden of nondomestic rates may be shifted backwards from the occupiers of business property to the owners of business property. This occurs if the rents that property owners can charge their tenants are reduced by the imposition of business rates. In this case, the total cost of occupying a business property (i.e. rent plus rates) is increased by less than the full amount of the non-domestic rates paid by occupiers, and part of the burden of business rates is borne by property owners in the form of lower rental income than they would otherwise have received. The effective incidence of non-domestic rates is then said to fall partly on property owners, and only partly on occupiers.

Suggested Citation

  • Steve Bond & Kevin Denny & John Hall & William McClusky, 1996. "Who pays business rates?," Fiscal Studies, Institute for Fiscal Studies, vol. 17(1), pages 19-35, February.
  • Handle: RePEc:ifs:fistud:v:17:y:1996:i:1:p:19-35

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    References listed on IDEAS

    1. Taylor, John B, 1979. "Staggered Wage Setting in a Macro Model," American Economic Review, American Economic Association, vol. 69(2), pages 108-113, May.
    2. McDonald, John F., 1993. "Incidence of the Property Tax on Commercial Real Estate: The Case of Downtown Chicago," National Tax Journal, National Tax Association;National Tax Journal, vol. 46(2), pages 109-120, June.
    3. Kevin Denny & Ridge, M, 1992. "The implications of a switch to locally varying business rates," Fiscal Studies, Institute for Fiscal Studies, vol. 13(1), pages 22-37, February.
    4. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    5. McDonald, John F., 1993. "Incidence of the Property Tax on Commercial Real Estate: The Case of Downtown Chicago," National Tax Journal, National Tax Association, vol. 46(2), pages 109-20, June.
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    Cited by:

    1. Gilles Duranton & Laurent Gobillon & Henry G. Overman, 2011. "Assessing the Effects of Local Taxation using Microgeographic Data," Economic Journal, Royal Economic Society, vol. 121(555), pages 1017-1046, September.

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