Property Entrepreneurs

FAQs - Community Infrastructure Levy (CIL)

The Community Infrastructure Levy (CIL) is a charge that was introduced by the Planning Act 2008 and came into force on 6 April 2010. It can increase the cost of developing both residential and commercial property but the amount of levy payable will vary depending upon the nature of the development.

Below are some frequently asked questions on the levy.

What is the relevant legislation?

Community Infrastructure Levy Regulations 2010 and the Community Infrastructure Amendment Regulations 2012.

Who is charging it?

The charging authorities are the district and unitary authorities, the London Boroughs, National Park authorities, Broads and the Mayor of London.  To know whether a charging authority has brought a CIL charge into effect, you can check its website.  There is no CIL charge unless a charging schedule is in place and under the regulations the authority’s CIL charging schedule needs to be on its website.

What sort of development is liable?

The sort of developments which are liable for CIL are new or extended buildings.  Neither roads nor buildings into which people do not normally go or which they only go into intermittently for inspecting and maintaining fixed plant or machinery are not CIL liable.

What is it charged on?

The charge is on the basis of £ per square metre of new floor area created plus any indexing for inflation.  The actual rate will vary from authority to authority.  CIL can be set on a geographical or intended use basis.  The Mayor of London’s CIL is set by geographical zone, for example, while Newark and Sherwood’s is a mixture of the two.

If CIL is charged on new floor area, is there a set off if I demolish a building?

Yes, any existing floor space that will be demolished before completion of the development and is in lawful use when planning permission is granted will be taken into account in the calculation.  Be careful, though, because to be or have been “in lawful use” means that part of the building being demolished must have been in use for a continuous period of at least six months within the period of 12 months ending on the day that planning permission is granted.  If this criterion is not met,  then there is no set off and the CIL liability will be higher than anticipated.

Are there any exemptions?

Yes. There are exemptions for minor developments where the gross area of new build is less than 100 square metres save where the development comprises one or more buildings; charitable exemption or relief; social housing relief; and a discretionary relief where it is applied. 

What is the procedure?

The main procedural steps are:

  • On making a planning application, an additional information requirement form needs to be submitted to enable the local authority to determine whether a development may be CIL liable.
  • The local authority gives notice of its calculation as to CIL liability (the liability notice).
  • The person who pays CIL is the person who assumes liability. This person needs to submit an assumption of liability notice to the collecting authority before commencement of development.
  • If applicable, a form claiming the exemption or relief needs to be submitted to the charging authority prior to commencement of development.  The exemption or relief can only be claimed prior to commencement.  If it is not claimed at that point, the ability to claim it is lost. 
  • The assumption of liability can be withdrawn or transferred.
  • The CIL liability arises on commencement of the development which is the earliest date on which a material operation begins to be carried out.  A material operation as per Section 56(4) of the Town and Country Planning Act 1990 means any work of construction in the course of the erection of a building, any work of demolition of a building, the digging of a trench which is to contain the foundations or part of the foundations of the building, the laying of any underground main or pipe to the foundations or part of the foundations of a building or to any such trench as mentioned above, any operation in the course of laying out or constructing a road or part of a road and any change in the use of any land which constitutes material development.  Beware as this is a very broad definition.
  • The collecting authority is to be notified of commencement by service of a Commencement Notice.  The CIL is payable within 60 days of the commencement date or by instalments if the authority has a policy in place for this.
  • On receipt of the Commencement Notice, the local authority should issue a Demand Notice on each liable person.

I think my work is permitted development.  Would it still be liable for CIL?

It is very likely that it will be liable if it falls within the scope of CIL.  If you intend to carry out development under the General Permitted Development Order, then you need to submit a notice of chargeable development to the local authority, unless the development is for under 100 sqm of new floor space and does not comprise one or more new dwellings.

I am buying/proposing to take a lease of a property on a new development.  Is there anything I should be aware of?

You need to have clearly established whether CIL has been paid in full or, if not, have it made clear who is going to be responsible for paying it.

If my proposal is liable for CIL then will I also have to make payments under a s.106 agreement?

Quite possibly yes.  Government Guidance issued in December 2012 stated that there should be no actual or perceived “double dipping” with developers paying twice for the same item of infrastructure.  When an authority introduces CIL, it should set out a list of projects or types of infrastructure that it intends to fund through the levy.  The authority’s s.106 requirements should be scaled back to matters which are directly related to a specific site and which are not on the CIL list.  Where the list has a generic item such as “education” or “transport” then s.106 contributions should not normally be sought for specific projects which fall in that category unless they have been justified with reference to underpinning evidence at the point where the CIL schedule underwent initial examination.

It is worthwhile adding that social housing does not fall within the items that can be funded by CIL.

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