FAQ on CIL
CIL is a potentially very expensive charge that can make or break a development. If your local authority has introduced it, then you must account for the costs before agreeing to purchase the land or property. Here at Planning Geek, we aim to remove some of the confusion surrounding CIL by answering many of the most common questions or FAQ.
What is the Community Infrastructure Levy (CIL)
The Community Infrastructure Levy is a levy which some local authorities will charge on developments. The money raised will go towards the costs of infrastructure projects within the local authorities such as schools, transport improvements and GP Practices. The levy was introduced by the Government through the Planning Act 2008 and the CIL Regulations 2010 (which have been amended regularly with the latest in February 2018). It is a development contribution and applies to most new development, including individual building projects. It is a legally enforceable levy which is shown as a land charge on the local land charges register.
Does my local authority have CIL?
That is an impossible question to answer without knowing where your development is. But it is probably the most critical question. The good news is that it is not in Scotland or Northern Ireland. Only a small number of areas in Wales has it. In England around a third of the country is yet to implement it. Until we can get a comprehensive list of all local authorities please do a quick search on <your council> CIL.
Which developments are liable for CIL?
Development will potentially be liable for CIL if it:
• Is for a building into which people normally go; and
• Involves new build of at least 100m² gross internal area (GIA) floorspace; or
• Involves new build of less than 100m² GIA floorspace and the creation of one or more dwellings.
Are there any reasons why a development might not be liable for CIL?
- Involves only change of use, conversion or subdivision of, or creation of mezzanine floors within a building which has been in lawful use for at least six months in the 3 years prior to the development being permitted and does not create any new build floorspace; or
- Is for a building into which people do not normally go, or go only intermittently for the purpose of inspecting or maintaining fixed plant or machinery; or
- Is for a structure which is not a building, such as pylons or wind turbines; or
- Is for a use which benefits from a zero or nil charge (£0/m²) as set out in a CIL Charging Schedule
- Charity developments
- Social Housing developments
- Self build houses, if occupied by the self-builder for 3 years
- Self build residential annex or extensions if main residence and over 100 m²
The CIL form is still required to be completed even if you think you are exempt for any reason. If you fail to submit the form you will need to pay the CIL as if it was not exempt.
Is CIL payable on affordable homes
No, CIL is not chargeable on affordable homes or social housing developments.
Will a residential annex in my garden be liable for CIL?
Not if the property is at your main residence, however please note that your residential annex will become liable if within three years the annex is used for any purpose other than as an annex or the annex is let or either the main residence or annex is sold separately from the other.
Will a change of use from office to residential be CIL liable?
Yes. 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 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 redeveloped will their floorspace be deducted from the final floorspace of the new development when working out how much CIL is to be paid?
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 6 months within the past 3 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 2014 Regulations).
If I convert a detached dwelling into two semi-detached dwellings will I pay CIL?
Residential sub-divisions are not liable for CIL, however if a change of use, additional floor space (over 100 Square metres or more) are proposed then CIL would be liable.
I want to convert my barn which is not in residential use at the moment into a dwelling, will I have to pay CIL as I am creating a dwelling?
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 6 in 36 rule) and therefore you would not be liable for CIL.
Who is liable to pay the levy?
The responsibility to pay the levy rests with the ownership of land on which the liable development will be situated. Although liability rests with the landowner, the regulations recognise that others involved in a development may wish to pay. To allow this, anyone can come forward and assume liability for the development.
How is the levy paid?
The charge is levied in £ / m² on the net additional increase in floorspace. It will normally be collected as a monetary payment, although there is also provision for it to be paid by transfer of land to the local authority if certain criteria are met.
Is VAT applied to CIL charges?
The charge levied in £ / m2 on the net additional increase in floorspace for the CIL is exempt from VAT.
How will proposed levy rates respond to factors such as inflation?
In calculating individual charges for the levy, charging authorities will be required to apply an annually updated index of inflation to keep the levy responsive to market conditions. Therefore the actual CIL rate might be considerably higher than the published rate.
How is the levy collected?
The levy’s charges become due from the date of commencement of a chargeable development. When planning permission is granted, the local authority will issue a liability notice setting out the amount of the levy and the payment procedure. Unlike contributions collected through S106 agreements there is no time constraint for the spending of monies collected through CIL.
Can CIL be paid in instalments?
Usually each local authority will have a scheme to pay the levy in instalments. Often a portion prior at the start, then further payments after a set number of days. Check with your local authority for their scheme.
Will a development be liable to pay CIL if planning permission is granted before a CIL Implementation date is adopted?
No. There is no CIL liability for a planning permission if that planning permission was granted before the CIL implementation date. The relevant date is the date of the issuing of the planning permission decision notice.
Any other FAQ?
If you have any other FAQ please feel free to get in touch.