Business (non-domestic)
rates collected by billing authorities (in London the Borough
Councils and the Common Council of the City of London) are, subject
to special arrangements for the City of London, paid into a central
pool and re-distributed to billing authorities and major precepting
authorities. The Common Council's share of re-distributed rate
income, together with income from its council tax payers, revenue
support grant provided by the government and certain other sums, is
used to pay for the services provided by the Council and other
local authorities in your area.
Because of its special circumstances -
notably its very small resident population and high daytime
population - the City of London can set its own rate and retain
part of the proceeds to help pay for the services it provides. It
may set this rate, subject to certain constraints, at a higher or
lower level than the rate that applies outside the City of London.
The amount it must pay into the central pool is reduced by the
amount that the government believes it is reasonable for it to
retain. These arrangements ensure that City of London ratepayers
and council tax payers each bear an appropriate share of the costs
of providing the services that benefit them.