Dispelling the Myths of the Community Infrastructure Levy: Part 1
Posted on in Planning & Licensing
In our series on the Community Infrastructure Levy, this is part one – the basics.
What is CIL?
The Community Infrastructure Levy (CIL) is a discretionary planning charge introduced by the Planning Act 2008. It allows local authorities in England and Wales to raise funds from new development to help deliver infrastructure to support development in their area. CIL operates through the Community Infrastructure Levy Regulations 2010, which have been amended several times.
What development is liable?
CIL may apply to any development that:
- Creates 100 sqm or more of net additional floorspace, or
- Creates a new dwelling of any size.
How is CIL calculated?
CIL is generally calculated by multiplying the gross internal area (GIA) of a development by the relevant rate for that development type.
Valuation Office Agency appeal decisions confirm that GIA includes:
- Porches
- Loft or storage space with permanent access (e.g. fixed staircases or doorways)
GIA excludes:
- Projecting fireplace recesses
- Bay windows
- Loft space accessible only by a ladder
Deductions may be available for floorspace that is demolished or retained. These will be explored in a later article.
Charging schedules
CIL only applies where a local planning authority has adopted a charging schedule, which sets out the applicable rates. Rates vary by development type, and some uses may be zero-rated.
Charging schedules can change, so it is important to check the position:
- On grant of permission (full permissions)
- On final approval of reserved matters (outline permissions)
- On discharge of pre-commencement conditions for each phase (phased permissions)
How does the CIL process work?
CIL operates through a strict procedural regime. Failure to follow the correct steps can result in:
- Surcharges
- Loss of exemptions or reliefs
- Mandatory late payment interest
Assumption of Liability Notice
Any person may assume liability for CIL by submitting an Assumption of Liability Notice. The person assuming liability does not need to own the land and may be a developer, landowner, or third party. For phased developments, different parties may assume liability for different phases.
Liability can be withdrawn at any time before commencement but cannot be assumed after development has started or transferred once the final payment has fallen due.
If no one assumes liability, it is apportioned between those with a material interest in the land at commencement.
Liability Notice
The collecting authority must issue a Liability Notice as soon as reasonably practicable after planning permission first permits development. This timing varies depending on the type of permission (full, outline, or phased).
A failure to issue the notice promptly may invalidate it. In R (oao Trent) v Hertsmere BC [2021], the High Court confirmed that reasonable delay is measured in weeks or months, not years.
Amongst other things, this notice sets out:
- The amount of CIL payable
- All relevant floorspace, including floorspace potentially eligible for relief
A revised Liability Notice may be issued if liability changes before commencement (for example, if relief is granted).
Commencement Notice
A Commencement Notice must be submitted before any chargeable development begins.
Developers must ensure the collecting authority has received it. In appeal decision APP/J4423/L/20/1200456, the failure to provide proof of submission resulted in a surcharge being upheld. Commencing development without confirmation of receipt was described as a “risky strategy”.
If no Commencement Notice is submitted, the authority will determine a deemed commencement date, and surcharges will apply.
Demand Notice
The Demand Notice is issued to the liable party and must:
- Refer back to the Liability Notice to which it relates
- Confirm the commencement or deemed commencement date
- State the amount payable, including any interest or surcharges
- Set out payment deadlines
CIL is usually payable on commencement, although instalment policies may allow staged payments.
What counts as commencement?
Development is treated as commencing when any material operation begins, defined as:
- Construction in the erection of a building
- Work of demolition
- Digging of a trench which is to contain the foundations, or part of the foundations, of a building
- Laying of any underground main or pipes
- Any operation in laying out or constructing a road or part of a road
- Any change of use of any land which constitutes material development
Even minor works can trigger commencement. In appeal APP/U1105/L/23/3329432, trench digging was held to constitute development, and the deemed commencement date determined by the collecting authority was upheld.
Developers should carefully consider the above definition when planning implementation strategies. Notably, CIL liability is commonly triggered before section 106 obligations.
Key takeaways
CIL is a procedural jungle where small mistakes can be costly.
Our expert team helps you cut through the complexity by:
- Explaining the CIL Regulations clearly
- Identifying exactly how CIL affects your project
- Advising on exemptions and reliefs
- Managing challenges, reviews, and appeals
Look out for our further articles in this series – coming soon!
How we can help
Our planning team can guide you through the Community Infrastructure Levy process and advise on any CIL appeals, helping you avoid surcharges and ensure compliance. Contact our experts by phone on 01392 207020 or email enquiries@tozers.co.uk.