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The implications of a switch to locally varying business rates


  • Michael Ridge
  • Kevin Denny


It has been nearly 2 years since the UK government reformed the system of local business rates to introduce a uniform business rate (UBR), but the debate continues over the merits of the new system. The change across regions in the revenues raised by the uniform system of business rates introduced in 1990 was due to 2 distinct components: a UBR effect and a reassessment of rateable values effect. Four alternative models of locally varying business rates were analyzed. These models are distinguished by alternative assumptions about resource equalization. A return to a system similar to the pre-1990 varying rates system would unfairly burden businesses in areas of low population. An improved model would take into account the degree of business concentration within a local authority. Using a model that relates local business tax rates to expenditure per establishment rather than per capita appears to be a more appropriate way of achieving horizontal equity.

Suggested Citation

  • Michael Ridge & Kevin Denny, 1992. "The implications of a switch to locally varying business rates," Open Access publications 10197/153, School of Economics, University College Dublin.
  • Handle: RePEc:ucn:oapubs:10197/153

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    Cited by:

    1. 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.


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