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The implications of a switch to locally varying business rates
Ridge, Michael; Denny, Kevin
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.
Keyword(s): Statistical analysis; Rates; Measurement; Mathematical models; Fiscal policy; Business conditions; Property tax--Great Britain; Fiscal policy--Great Britain; Great Britain--Economic conditions
Publication Date:
Type: Journal article
Peer-Reviewed: Unknown
Language(s): English
Institution: University College Dublin
Publisher(s): Blackwell Publishing on behalf of Institute for Fiscal Studies
File Format(s): other; application/pdf
First Indexed: 2012-08-25 05:25:12 Last Updated: 2018-10-11 16:36:45