FAQ on CIL
A handy CIL FAQ. 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 continuous use for at least six months in the three 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 (needs to be entire building and not parts); 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 and a claim for charitable relief is made and accepted before development commences;
- Social Housing developments and a claim for social housing relief is made;
- Self build houses, if occupied by the self-builder for three years;
- Self build residential annex or extensions if main residence and over 100 m²;
- Is for a use or area which benefits from zero or nil charge set out in the CIL Charging schedule.
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 where a claim for relief has been submitted.
Can I claim relief from CIL?
Depending on the circumstances, the following forms of relief may be available:
- mandatory charitable relief
- discretionary charitable relief
- mandatory social housing relief
- discretionary social housing relief
- exceptional circumstances relief.
Claims for charitable relief or social housing relief should be submitted on Form 10: Charitable and/or Social Housing Relief Claim.
Claims for exceptional circumstances relief should be submitted on Form 11: Exceptional Circumstances Relief Claim.
Where a development originally receiving charitable or social housing relief from CIL has, or is intended to be, altered in a way which changes the extent of the relief previously granted, then a further exemption claim must be made on Form 12: Further Charitable and/or Social Housing Relief Claim.
If outline permission is granted before a CIL charging schedule is adopted but the details don’t come until after the charging schedule is adopted, can CIL be collected following granting consent on the details?
No, CIL cannot be collected on ‘reserved matters’ planning permissions if they have been granted outline planning permission prior to CIL coming into force locally.
Is CIL payable on parts of a building that people do not normally go in, for example a plant room
Yes, it is. These areas should not be excluded from the calculation of a building’s floorspace. Exemption only applies if the whole building is one that people do not normally go in to
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 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 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 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 2014 Regulations).
If I convert a detached dwelling into two semi-detached dwellings or a house into two flats will I pay CIL?
Residential sub-divisions are not liable for CIL, however if a change of use, additional floor space (over 100 m² or more) are proposed then CIL would be liable. It must however have been in a continuous lawful use for six months out of the last three years.
How long does a building have to be vacant before the floorspace can no longer be offset against CIL liabilities triggered by new development?
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.
What if only a small part of a building to be demolished has been in use over the last 6 months?
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. This is defined in Regulation 40(11) of the CIL Regulations 2010 (as amended).
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 six in 36 rule) and therefore you would not be liable for CIL.
Is CIL liable on a listed building or within the curtilage of one?
Yes CIL is liable unless it qualifies under one of the other exemptions on this page
When is a liability notice issued?
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.
When is a demand notice issued?
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.
When is CIL payment due?
CIL will be payable within 60 days of development commencing, or if the local authority has an instalment policy, then in accordance with that policy.
- Where no-one has assumed liability but a commencement notice has been received, payment is due immediately upon commencement
- Where the Council has determined a ‘deemed commencement’ date (because no valid Commencement Notice was provided), payment is due on the deemed commencement date
- There are also special provisions under Regulation 71 where the Council has to transfer liability to the land owners or where charitable or social housing relief has been granted and a ‘disqualifying event’ has taken place. These will be unusual events
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.
Are there any surcharges and late interest?
Surcharges and interest may be imposed as follows:
- If the development has commenced and no Commencement Notice has been received – £50 on each liable person (regulation 80)
- Where the Council has to apportion liability between different owners – £500 on each owner (regulation 81)
- For failure to submit a Notice of Chargeable Development – 20% of the chargeable amount up to a maximum of £2,500 (regulation 82)
- For failure to submit a Commencement Notice – 20% of the chargeable amount up to a maximum of £2,500 (regulation 83)
- For failure to notify the Council of a disqualifying event within 14 days – 20% of the chargeable amount up to a maximum of £2,500 (regulation 84)
- For late payment – 5% of the chargeable amount or £200 (whichever is greater) may be imposed after 30 days and again after 6 months and then after 12 months on any outstanding amount (regulation 85)
- Failure to comply with an information notice within 14 days – 20% of the chargeable amount up to a maximum of £1,000 (regulation 86)
- Late payment interest must be paid starting on the day payment was due at a rate 2.5 percentage points above the Bank of England base rate (regulation 87)
Any other FAQ?
If you have any other FAQ please feel free to get in touch and we will do our best.
Page Updated: 20th June 2021