Partner Karen Jones, in our Planning & Environmental Law team, explains Community Infrastructure Levy (CIL).
What is Community Infrastructure Levy (CIL)?
Community Infrastructure Levy (CIL) is a tax due on most new developments which creates a net additional floor space of 100sqm or more or creates a new house or a flat. CIL is only applicable where a charging authority has adopted a charging schedule, which sets out the CIL rates. The legislative framework for CIL is set out in Community Infrastructure Levy Regulations 2010 as amended.
When a person submits a planning application, they should also submit an Additional Information Form (Form 1), which enables the charging authority to calculate the amount payable. Once planning permission has been granted by the Local Planning Authority, the applicant of the planning permission/landowner/developer or other interested party must submit an assumption of liability form (Form 2) to the charging authority. Whoever assumes liability for the levy will be liable to pay it on commencement of development. Form 2 can be submitted before the application has been determined but it will not take effect until after the application is determined. Failure to assume liability will result in £50.00 per person who failed to assume liability if development has commenced (Regulation 80). Where a planning permission is granted for development by general consent i.e., under permitted development rights, a chargeable development notice must be submitted to the charging authority before the development is commenced, unless (a) the development is minor development, (b) an exemption for residential extension was granted or, (c) the chargeable amount due is zero.
After assuming liability, the charging authority will serve a liability notice, which sets out the charge due and details of the payment procedure on the person liable for CIL. The person who is liable for CIL can ask the charging authority to review the CIL calculation and the charging authority must issue a decision within 14 days (Regulation 113). If the person liable for CIL is not satisfied with the outcome of the review, they can submit an appeal to the Valuation Office Agency, within 60 days of the date of the liability notice issued (Regulation 114).
Exemption or relief
If you believe the development, you are building is entitled to exemption or relief, you must apply for the exemption or relief before the development commences. If you fail to apply for exemption relief before the development commences, you will no longer be eligible for the exemption or relief. Appeal against the decisions granting charitable relief and for exemptions for residential annexes can be made before the end of a 28-day period beginning on the date of the decision. The appeal will be determined by a valuation officer or district valuer.
Commencement notice
Once the liability notice has been issued by the charging authority, the liable parties must submit a commencement notice, prior to commencing development, (Form 6) to the charging authority no later than the day before chargeable development begins. The exception to this is where (1) the development is minor development, (2) the chargeable amount due is zero, or (3) exemption for residential extensions was granted. Where the charging authority has not received a commencement notice and the development has commenced, or has received the commencement notice, however, believes that the development commenced earlier than the date stated, the charging authority can determine deemed commencement date. Persons liable can appeal against the determination of deemed commencement date and the appeal must be made before the end of 28-day period beginning on the date of issue of the demand notice. The appeal will be determined by the Secretary of State or person appointed by the Secretary of State.
Failure to submit a commencement notice to the charging authority will result in a surcharge added to the CIL invoice of 20% of the chargeable amount or £2,500.00 whichever is lower (Regulation 83). An appeal against the imposition of surcharge can be made before the end of 28-day period beginning on the date of issue of the demand notice.
Following the receipt of a commencement notice, the charging authority must serve a demand notice on each person liable to pay CIL in respect of a chargeable development, or a decision by the charging authority of the deemed commencement date. The demand notice is a reminder to the liable parties how much they owe in relation to CIL.
If CIL payments are not met, then the charging authority has the responsibility and discretion to use enforcement powers. The type of enforcement ranges from a Stop Notice prohibiting the development from continuing until payment is made (Regulations 89-94), to an application for liability order. Alongside this, the impact of late payment can lead to surcharges being added to the amount due.
The CIL process and timescales
You can download our summary of the process and the timescales involved here (PDF).
If you would like any assistance navigating the CIL procedure, understanding whether your development would be liable to a CIL charge and whether any exemptions are available, then please get in touch with us to discuss it further.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
