Dispelling the Myths of the Community Infrastructure Levy: Part 3

This is the third article in our series on the Community Infrastructure Levy. In this article, we drill down into some key cases that demonstrate how CIL operates in practice and highlight where strict compliance is essential, discretion is limited, and timing is critical. By understanding how the courts interpret the CIL Regulations 2010 (the Regulations), applicants can structure their development proposals and commencement strategies with greater certainty and reduced risk.

Limited discretion to withdraw a liability notice

In our second article, we focused on disqualifying events for the self-build exemption from CIL. In this article, we turn to the second ground of challenge in R (Luck) v Bracknell Forest BC [2025] EWHC 2984 (Admin). Mr Luck argued the council had a general discretion not to collect CIL and a general power to withdraw liability notices under Regulation 65(7).

Regulation 65(7) provides that, “A collecting authority may withdraw a liability notice issued by it by giving notice to that effect in writing to the persons on whom it was served.”

The High Court held that Regulation 65(7) did not confer a broad discretion to waive CIL for two main reasons:

1.Collection of tax:

• There is no expectation a tax collecting authority has discretion to waive a tax that Parliament has set (R (Clamp) v HMRC [2022] 1 WLR 1067);
• CIL is akin to a tax.

2. Inconsistent with the CIL regime:

• There is no express power to withdraw demand notices;
• The discretion to grant relief from CIL liability is for limited and specific circumstances.

Additionally, the judge noted that the Regulations anticipate some degree of double recovery and that the developer had alternative means to reduce liability, including the abatement provisions under Regulation 74B.

Key takeaways

Understanding that CIL operates as a non-negotiable, formula-driven charge enables applicants to price risk accurately, structure transactions appropriately, and avoid viability gaps that cannot later be remedied through planning discussions.

When delays in issuing a revised liability notice are not fatal

The case of Braithwaite & Anor, R (On the Application of) v East Suffolk Council [2022] EWHC 691 (Admin) considered the effect of Regulation 65, in particular:

1. Regulation 65(1) – a collecting authority must issue a liability notice “as soon as practicable” after the date on which planning permission first permits development.
2. Regulation 65(5) - a collecting authority may “at any time issue a revised liability notice in respect of a chargeable development”.
3. Regulation 65(8) – where a collecting authority issues a liability notice, “any earlier liability notice issued by it in respect of the same chargeable development ceases to have effect”.

Facts in brief:

• The developer obtained full planning permission for a mixed-use scheme in November 2017. A CIL liability notice was issued shortly thereafter.
• The developer subsequently sought variations under section 73 of the Town and Country Planning Act 1990, altering the scheme’s floorspace. The section 73 permission was granted in February 2019, and the revised development commenced in August 2019.
• The council did not issue a CIL liability notice for the section 73 scheme until June 2020, at which point a bespoke instalment plan was agreed with the developer.
• The developer failed to pay the first instalment, prompting the council to issue a revised demand notice with a surcharge.
• The developer then paid the first instalment but appealed the surcharge under Regulation 117.
• The Inspector allowed the surcharge appeal, finding:
• The 2020 liability notice had not been correctly served on the “relevant person” under Regulation 65(3)(a); and
• A c.16-month delay between the grant of section 73 permission and issuance of the 2020 notice could not reasonably satisfy the “as soon as practicable” requirement of Regulation 65(1).
• The Inspector exercised powers under Regulation 118(6) to quash the demand notice.
• In response, the council issued a revised liability notice in September 2021, correctly identifying the relevant person as defined in Regulation 65(12) (in this case, the applicant for planning permission).
• The developer sought judicial review of the 2021 liability notice, arguing that its issuance over two years after the section 73 permission breached the “as soon as practicable” requirement in Regulation 65(1).

High Court decision

The High Court dismissed the claim and held:

• The Inspector lacked power to quash the 2019 liability notice and did not purport to do so.
• Regulation 65(5) allows an authority to amend or replace a valid earlier liability notice, but does not apply where no valid notice exists.
• The 2020 liability notice remained valid until quashed by a competent court (R (Trent) v Hertsmere BC [2021] EWHC 907 (Admin)).
• Regulation 65(8) causes a notice to cease to have effect but does not eliminate its existence.
• As the 2020 notice remained in force, the council was entitled to issue a revised liability notice under Regulation 65(5) without being constrained by the Regulation 65(1) “as soon as practicable” requirement.
• The developer accepted the instalment plan despite the first round of delay, effectively waiving any objection to late service.
• The developer only challenged surcharges seven months later, and the judicial review was filed nearly 18 months after the 2020 notice, exceeding the statutory time limit to bring this kind of claim promptly and in any event within three months.

Key takeaways

Only the court has the power to quash liability notices. Delays in issuing a revised liability notice under Regulation 65(5) are not fatal if the earlier notice is valid, and acceptance of payment terms can constitute a waiver of delay. Judicial review must be pursued promptly in accordance with statutory limits.

Conclusion

These cases highlight that:

• There is no broad or general discretion to withdraw liability notices or CIL.
• A revised notice is not constrained by the “as soon as practicable” requirement if it simply amends or replaces a valid earlier notice.
• The courts treat CIL as analogous to a tax.
• Attempts to resolve CIL issues through informal negotiation with the authority are unlikely to succeed.

The experienced planning team at Tozers can help applicants structure development proposals and commencement strategies with greater certainty and manage CIL risk more effectively.

Contact our legal experts