Who pays business rates?

Stephen Bond, Kevin Denny, John Hall and William McClusky
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John Hall: Institute for Fiscal Studies

Fiscal Studies, 1996, vol. 17, issue 1, 19-35

Abstract: 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.

Date: 1996
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