Planning conditions, obligations and the community infrastructure levy. Planning for nationally significant infrastructure. Planning issues in property and insolvency.
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Planning obligations. Sign-in Help. In what circumstances does CIL liability arise? Meaning of commencement Contrast with section agreements More Assumption of liability Withdrawal of assumed liability Transfer of liability Default liability Death of liable person Joint owners and land held on trust When must CIL be paid?
Who charges and collects CIL? Access this content for free with a trial of LexisPSL and benefit from: Instant clarification on points of law Smart search Workflow tools 36 practice areas. Back Step 1 of 2 Basic information. Step 1 Step 2 Name. Miss Mrs.
Name Click to edit. Name No Content These fields are required. Email Email id Click to edit. Email No Content This field is required. This must be done within 14 days of the disqualifying event. If a disqualifying event happens before the development commences, the relief would be cancelled and the liability to the full levy would be recalculated.
If the disqualifying event occurs after commencement, the charitable relief, in respect of the material interest to which the relief relates, is withdrawn and the person is liable to pay an amount of CIL equal to the withdrawn relief. In either instance, the collecting authority must issue a revised liability notice showing what is payable and must issue a demand notice to collect the new amount. If a claimant does not inform the collecting authority in writing of a disqualifying event within 14 days of the disqualifying event occurring, they will immediately be liable to pay back the charitable relief and a surcharge see regulation See further details on appeals.
A mandatory charitable exemption cannot be granted where it would constitute a State aid. However, if a mandatory charitable exemption would otherwise have been allowed, and the charging authority has a published policy on discretionary charitable relief under regulation 45 exists, then a charitable institution may be able to benefit from relief to the extent to which it is not a notifiable State aid.
Charging authorities may wish to formulate policies which automatically ensure that mandatory charitable exemption claims which fail solely on State aid grounds are considered for relief under regulation Discretionary charitable investment relief under regulation 44 can also be provided where relief is not a notifiable State aid.
View more details on this and the de minimis block exemption. Where a collecting authority is unable to recover an amount of CIL from a party who assumed liability for the levy the collecting authority may transfer the liability to the owners of the relevant land in question including charities which own an interest. A collecting authority may only transfer the liability after it has taken all reasonable efforts to recover the outstanding amount. A charity benefiting from discretionary charitable relief may be liable to pay a share of the outstanding amount based on its material interest in the land.
In order to manage the risk of a default of liability by another party, charities should carefully select development partners and make appropriate contractual arrangements to safeguard their interests.
A charity receiving a mandatory charitable exemption under regulation 43 will continue to be exempt from any liability to pay the outstanding charge. Social housing relief is a mandatory discount that can be applied to most social rent, affordable rent, and intermediate rent dwellings, provided by a local authority or private registered provider, and shared ownership dwellings. Subject to meeting specific conditions, social housing relief can also apply to discounted rental properties provided by bodies which are neither a local authority nor a private registered provider.
To be eligible, a planning obligation must be entered into prior to the first sale of the dwelling designed to ensure that any subsequent sale of the dwelling is for no more than 70 per cent of its market value.
Regulation 49 as amended by the Regulations and the No. To qualify for social housing relief, the claimant must own a material interest defined in regulation 4 2 in the relevant land and have assumed liability to pay the levy for the whole chargeable development. A charging authority may offer separate discretionary relief for dwellings sold for no more than 80 per cent of their market value subject to specific criteria set out in regulation 49A 2.
See What is discretionary relief for social housing? When applying for relief, a claimant must provide evidence that the chargeable development qualifies for social housing relief. The Regulations provide that dwellings no longer meeting these requirements must pay the levy. Dwellings which qualify for mandatory social housing relief under regulation 49 7A inserted by the Regulations must be let to those persons whose needs are not served by the commercial housing market.
Eligibility should be based on criteria agreed between the provider and the relevant local housing authority and secured via a planning obligation. Market rent should be calculated in accordance with a Royal Institution of Chartered Surveyors recognised method. Paragraph: - deleted - see previous version.
If a charging authority wishes to offer discretionary social housing relief, it must publish its policy setting out what is required to qualify for this relief, including the criteria governing who is eligible to occupy the homes and how these will be allocated. Discretionary social housing relief where applied for and obtained will apply to affordable dwellings which meet the criteria set out in regulation 49A inserted by the Regulations and as amended by the No.
The levy collecting authority handles claims for social housing and discretionary social housing relief. In most cases except in London , the collecting authority and the charging authority are the same. A claimant wishing to apply for social housing relief should use Form Claiming charitable and social housing relief.
To qualify for relief, the claimant must be an owner of a material interest in the relevant land defined by regulation 4 2 and have assumed liability to pay the levy on the chargeable development. Flow chart showing procedure for applying for and obtaining the social housing exemption PDF , KB , 1 page. Social housing relief is calculated according to paragraph 6 of Schedule 1 inserted by the Regulations.
The figure for a given calendar year is the figure for 1 November of the preceding year. In the event that the index ceases to be published, the Retail Prices Index must be used instead. A claim for relief will lapse if development commences before the collecting authority has notified the claimant of its decision. A party claiming social housing relief must submit a commencement notice to the charging authority for a development that is granted relief. The date of commencement determines when the 7-year clawback period expires, apart from dwellings granted social housing relief under regulation 49 7A for which the clawback period expires 7 years after the dwelling is first let.
For dwellings granted social housing relief under regulations 49 7B and 49A 2 c i the clawback period ends with the day on which the dwelling is first sold regulation 2 1 as amended by the No. Relief can be claimed for communal development that is associated with a development involving social housing see Regulation 49C. To qualify, the communal development must be for the benefit of the occupants of more than one dwelling which qualifies for social housing relief whether or not it also benefits the occupants of the non-social housing.
The gross internal area of the communal development that qualifies for relief is calculated using the formula in Regulation 49C. This provides that the communal development is apportioned between the area of development qualifying for social housing relief and other development permitted by the same planning permission. The effective enforcement of social housing relief — which applies to social housing and discretionary social housing relief — relies on identifying the beneficiary or beneficiaries of that relief.
The initial beneficiary of all social housing relief on a chargeable development is the party who submitted the claim — regardless of whether he or she owns some or all of the land on which the social housing will be built. However, the relief attached to each qualifying dwelling is transferred if the land on which they sit, or will sit, is sold before they are ready for occupation. The relief for those dwellings is calculated and transferred from the old to the new beneficiary under regulation 52 , as amended by the Regulations.
The seller must notify the collecting authority in writing of the sale, copying this to the buyer and the previous beneficiary of relief for those dwellings if this is not the seller. As the claimant may only own one of the material interests in the relevant land, the seller of the land might not be the current beneficiary of relief.
He or she will in most cases know about the social housing relief attached to that land, however, through the liability notice. Under regulation 54 , a collecting authority may serve an information notice on the claimant to enable it to calculate this. After calculating the revised relief, the collecting authority must issue an updated liability notice that identifies all social housing relief beneficiaries and what relief they benefit from.
The relief for that dwelling must be repaid by the beneficiary. The occupant of the dwelling will never pay clawback — liability falls on the owner of the land immediately prior to the dwelling being made available for occupation. If a disqualifying event occurs before the commencement of development, social housing relief would be cancelled and the liability to the levy would be recalculated.
A disqualifying event is any change to a qualifying dwelling causing it to no longer qualify for social housing relief — regulation 53 , as amended by the , and Regulations , and the No 2 Regulations. In the case of a dwelling that was granted social housing relief under regulation 49 7A , the beneficiary must additionally repay the interest on the withdrawn relief calculated from the date on which the chargeable development commenced see regulation 53 4A.
The sale of a qualifying dwelling is not a disqualifying event if the proceeds of sale are spent on another dwelling that qualifies for the relief. Transferring the sale proceeds to the Secretary of State, the Greater London Authority, a local housing authority or Homes England are also not disqualifying events. Disqualifying events do not include the purchase of social housing by the Regulator of Social Housing. The provision of social housing is a service of a general economic interest.
Relief from the levy for social housing has been designed so that it complies with the requirements of the European Union block exemption for services of a general economic interest. Charging and collecting authorities will need to be aware of this block exemption when implementing these regulations. View more information on State aid. However, to fit within the exemption, any housing benefiting from the State aid relief must meet 3 criteria:.
Local policies granting discretionary social housing relief need to comply with the European Commission criteria set out above. Where a collecting authority is unable to recover an amount of CIL from a party who assumed liability for the levy, the collecting authority may transfer the liability to the owners of the relevant land in question. Where the outstanding amount is defaulted in this way, it will be apportioned between the owners of the relevant land according to their material interest in the relevant land defined in regulation 4 2.
A person or organisation building or owning social housing within the development will still be required to pay a share of the amount based on its material interest in the land. In order to manage the risk of a default of liability by another party, social housing providers should carefully select development partners and make appropriate contractual arrangements to safeguard their interests. Charging authorities may offer relief from the levy in exceptional circumstances where a person responsible for a specific scheme cannot afford to pay the levy.
A charging authority wishing to offer exceptional circumstances relief in its area must first publish a notice of its intention to do so. A charging authority can then consider claims for relief on chargeable developments from an owner of a material interest in the land on a case by case basis, provided the conditions set out in regulation 55 as amended by the and Regulations are met:.
The powers to offer relief can be activated and deactivated at any point after the charging schedule is approved. If a charging authority wishes to offer exceptional circumstances relief, it must publish a notice specifying a date from when this will apply, and must follow the procedures for offering relief set out in regulations 55 to 58 as amended by the , and Regulations.
Exceptional circumstances relief can be considered where a section agreement is in place in relation to the planning permission for the development. A charging authority can give relief from the levy if it deems that the levy would have an unacceptable impact on the viability of a development. There is no statutory definition of what constitutes the viability of a development. The charging authority has the discretion to make judgements about the viability of the scheme in economic terms for example, see National Planning Policy Guidance on viability.
However, it is important to ensure that any exceptional circumstances relief is based on an objective assessment of viability as set out in viability guidance. Relief may be granted for all or part of the liability in relation to a chargeable development. This can mean the whole development or a part of a scheme where a development proceeds in phases as separate chargeable developments. Even if exceptional circumstances relief is available in a charging authority area, each case is considered individually by the authority and it is at their discretion whether they wish it to apply in that case or not.
However, use of an exceptions policy enables charging authorities to avoid rendering sites with specific and exceptional cost burdens unviable.
Regulations 55 to 57 , as amended by the , and Regulations set out the requirements for claiming and granting exceptional circumstances relief. London borough councils and the Mayor of London may each offer exceptional circumstances relief.
Where only the borough council offers relief, the above general procedure applies. Where the Mayor decides to make relief available on his levy, additional procedures apply — these are set out in regulation 58 , as amended by the and Regulations. All claims for exceptional circumstances relief in London must be made to the relevant borough council. If only the Mayor makes exceptional circumstances relief available, the borough council must refer the claim and supporting documentation to the Mayor as soon as possible.
If both the Mayor and the borough council make relief available, the borough council must first consider whether to offer relief and if so, how much. The borough council only needs to refer the claim to the Mayor where the relief it proposes to give would still result in an unacceptable overall impact of levy charges on the viability of the development. In either situation, where a claim is referred, the Mayor must determine whether to give relief and if so, how much to give and must inform the borough council of his decision as soon as possible.
The borough council is not bound to any proposal it originally made to the Mayor on how much relief it may grant. It could, for instance, increase its offer to ensure the total relief given by the borough and the Mayor returns the development to an acceptable level of viability. These events include the granting of charitable or social housing relief to the chargeable development, the sale of relevant land, or if the chargeable development has not been commenced within one year.
If there is a disqualifying event, the owner of the material interest in the relevant land must notify the charging authority in writing within 14 days. He or she must also send a copy of the notification to all owners of material interests in the relevant land. When it receives this notification, the charging authority must copy it to the collecting authority, if this is not the same body. If the person responsible for enforcing the section agreement is not the charging or collecting authority, the charging authority must also send a copy of the notification to that person.
Exceptional circumstances relief cannot be granted if it would constitute a notifiable State aid. If the necessary qualification requirements are met and the application process is completed within required timescales, an exemption from the Community Infrastructure Levy will be available to anybody who is building their own home or has commissioned a home from a contractor, house builder or sub-contractor.
Individuals benefiting from the exemption must own the property and occupy it as their principal residence for a minimum of 3 years after the work is completed. There is a set process which requires 4 steps to be undertaken within the required timescales.
Failure to follow the set procedures within the required timescales will mean that the exemption will not be obtained, or will be rescinded if previously obtained, and a full levy liability will be incurred.
Failure to submit a commencement notice before building works begin will result in a surcharge. The exemption must be applied for and obtained, and a commencement notice must be received by the collecting authority, prior to the commencement of the development start of works on site. In addition, following completion of the build, a form must be submitted to the collecting authority, along with the additional supporting evidence described later in this guidance, within 6 months of the date of the compliance certificate regulation 54C inserted by the Regulations.
The exemption is applicable to homes built or commissioned by individuals for their own use. Self-build communal development also qualifies for the exemption where it meets the required criteria. There is also an exemption for people who extend their homes or build residential annexes. A self-build housing exemption is available to anyone who builds or commissions their own home for their own occupation.
On completion, they must provide the requested supporting evidence, and the property must remain their principal residence for a minimum of 3 years. If personal circumstances change and the applicant wants to dispose of the property before the 3-year occupancy limit expires, they must notify the charging authority and the levy then becomes payable in full.
Failure to notify the charging authority will result in enforcement action against the applicant and surcharges will become payable. View more information on disqualifying events. Regulation 54B was amended by the Regulations. Applicants wishing to claim must take 4 specific steps. Three of these steps must be undertaken before the applicant commences their development and the 4th step must be undertaken following completion of the build.
The procedure is set out here. Firstly, the applicant must assume the liability to pay the levy in relation to the development. This is done by completing an Assumption of Liability form Form 2. If the original levy liability was in the name of another person, the self-build applicant must complete a Transfer of Assumed Liability form Form 3 and submit this to the collecting authority.
At this stage, the applicant must self-certify:. On receipt of the claim form, the collecting authority must notify the applicant in writing as soon as practicable, confirming the amount of exemption granted. The collecting authority should also explain the requirement to submit a commencement notice no later than the day before the day on which the chargeable development is to be commenced see regulation 67 1.
If the development commences before the collecting authority has notified the claimant of its decision on the claim, the relief would be cancelled and the liability to the levy would be recalculated. A commencement notice Form 6 must be received by the collecting authority prior to the commencement of the development start of works on site. The commencement notice must state the date on which the development will commence, and the collecting authority must receive it before that date regulation If following commencement of the development, the planning permission is amended through a section 73 permission, the applicant is not required to submit a new commencement notice regulation 54B 3A inserted by the Regulations.
Further information must also be provided by the applicant once their self-build home is complete, as highlighted below. Following completion of the build, the Self-Build Exemption Claim Form - Part 2 Form 7 must be submitted to the collecting authority, along with the additional supporting evidence, within 6 months of the date of the compliance certificate. Flow chart showing the procedure for applying for and obtaining an exemption for a self-build development PDF , KB , 1 page.
Within 6 months of completing the self-build home, the applicant must submit additional supporting evidence to confirm that the project is self-build. Completion for the purposes of the self-build exemption is defined as the issuing of a compliance certificate for this development under either Regulation 17 of the Building Regulations or Section 51 of the Building Act If the evidence is not submitted to the collecting authority within the 6-month time period, the full levy charge becomes payable.
In addition to the above, applicants must also provide a copy of one of the following please see note below the listed items :. NOTE: The charging authority has the discretion, but is not required, to accept other forms of documentary evidence instead of any of the 3 items above.
This should be agreed in advance with the charging authority at the point of making the Part 1 application for the exemption or as soon as possible thereafter but the charging authority may still consider utilising discretion at the Part 2 stage of the process.
For multi-unit schemes for example, where a builder sells serviced plots, or a community group works with a developer , applicants should consider applying for a phased planning permission, to allow each plot to be a separate chargeable development. This will prevent the charge being triggered for all plots within the wider development as soon as development commences on the first dwelling.
This will also ensure that if a disqualifying event occurs affecting one unit, it does not trigger a requirement for all to repay the exemption. See more about phased payments. Self-build communal development benefits from the levy exemption if it is for the use of the occupants of more than one self-build home.
Such development may include, for example, shared facilities or guest accommodation. An exemption from the levy will not be granted to communal development for the use of the general public or for commercial development such as a retail unit. The self-build communal development exemption is calculated using the formula in regulation 54A. The gross internal area of the communal development is apportioned to the individual self-build units on the site, based on the gross internal area of the self-build dwellings.
A self-build exemption is revoked if a disqualifying event occurs during the 3-year occupancy period. A disqualifying event for a self-build exemption is:. If a disqualifying event occurs, the person benefitting from the self-build exemption must notify the charging authority in writing within 14 days. A copy of the notification must be sent to all owners of material interests in the relevant land.
When it receives this notification, the charging authority must copy it to the collecting authority, if this is not the charging authority. The only exception is where the claimant of the exemption fails to comply with the evidence requirements on completion. In such cases, the collecting authority must give the claimant at least 28 days to submit the necessary form and evidence before taking any further action. Applicants have a right to appeal against the value of the exemption granted, under regulation B.
Appeals should be lodged with the Valuation Office Agency. A self-build exemption cannot be granted if it would constitute a notifiable State aid. In certain cases, if a person needs to amend their planning permission through a section 73 permission, they may still be eligible for the exemption see regulation 58ZA inserted by the Regulations.
This provision applies to exemptions for residential annexes and extensions; self-build housing; charitable relief and social housing relief. Where the value of the exemption or relief has changed, the person would have to submit a new claim for a new exemption or relief. Local planning authorities are entitled to ask for relevant information when the planning application is submitted. Planning authorities may refuse to validate the planning application if this information is not provided.
When any person i. In most cases, the planning authority and the collecting authority will be the same body see regulation Collecting authorities may request relevant information from charging authorities, local planning authorities, or the Secretary of State regulation Collecting authorities may also use any other information they have access to in carrying out their non-CIL functions to determine the correct charge, as long as it was not obtained by an authority elected member in their capacity as a member of a police and crime panel or is obtained by the authority in its capacity as an employer see regulation In most cases, the amount of levy that is payable is calculated by multiplying the additional gross internal area by the rate for a particular development type.
The rate is set out in the relevant charging schedule. Free Practical Law trial. To access this resource, sign up for a free trial of Practical Law. Free trial. Already registered? Sign in to your account. Our Customer Support team are on hand 24 hours a day to help with queries:.
Also Found In Planning. Permitted development is subject to the Community Infrastructure Levy like any other development. Changes of use to residential are also not exempt from the CIL but an offset is currently allowed for existing floorspace that has been occupied in lawful continuous use for at least 6 of the last 36 months.
Some local authorities also have a zero rate for residential. If in doubt ask especially if your office block has been empty for a while. Where buildings are demolished to make way for new buildings, the charge will be based on the floorspace of new buildings less the floorspace of the demolished buildings provided the buildings were in lawful use prior to demolition.
Therefore, if more floorspace, which was in a lawful use prior to the development, is demolished than erected in the new development no CIL would be liable. Where part of an existing building has been in lawful use for a continuous period of six months within the past three years, parts of that building that are to be demolished or retained can be taken into account.
The way those parts are taken into account is set out in the formula in regulation 40 7 as amended by the Regulations. It must however have been in a continuous lawful use for six months out of the last three years. Floorspace subject to demolition or resulting from change of use can only be deducted where it has been in continuous lawful use for at least six months in the three years prior to the development being permitted.
If part of the building is in use for a continuous period of at least six months within the period of three years ending on the day planning permission first permits the development. Therefore, all the floorspace in the building would be deductible from the floorspace of the new buildings. The legal definition of building and planning unit will be important. A change of use for the barn to residential would not be liable for CIL as long as the barn is in lawful use under the six in 36 rule and therefore you would not be liable for CIL.
A liability notice is issued as soon as practical after planning permission is granted. In the event of an outline planning application, this will be once all reserved matters have been dealt with. If there are changes to the planning permission, such as increased floor space, then a revised liability notice will be issued. A new liability notice will be issued if any surcharges are due see below for those.
If neither increased floor space or surcharges see below then the charge will remain constant. A demand notice is issued on receipt by the local authority of a commencement notice or a notice of chargeable development. In other words once the planning permission is made extant and started.
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