What is CIL?
Community Infrastructure Levy (CIL) is a charge on additional floor space that Local Planning Authorities charge and which is designed to help fund local and sub-regional infrastructure identified in the Local Authority’s development plans.
CIL is based on a formula that relates to the size and character of the development. CIL is payable on development which creates net additional floor space. However, when calculating any increase in the additional floor space you can only take account of previous floor space if the building in question has been used for at least six months in the last three years.
CIL rates are expressed as pounds (£) per square metre of development – each ‘charging authority’ (who, in most cases is the relevant Local Planning Authority) will set their own CIL rates, following an assessment of the infrastructure needs in their area, for which CIL can be collected. CIL rates will also be index-linked on an annual basis to the national All-in Tender Price Index.
Does CIL affect my development?
CIL will only be payable where the charging authority has adopted a CIL charging schedule. There is no liability to CIL unless on the day that planning consent is granted there is a CIL charging schedule in effect. Prior to submission of your planning application, you should check whether there is a CIL charging schedule and if not, check with the Local Planning Authority if an CIL charging schedule is likely to come into effect as this would affect your application if it is adopted between your application being submitted and your consent being granted.
CIL only applies to “buildings” therefore any development of roads, pipelines, overhead cables and wind turbines will not be liable to pay CIL despite being considered to be building operations for planning purposes.
There are exemptions for minor development – a development will only be liable to CIL where the gross internal area of the new space is 100 square metres or more. Residential annexes and extensions are also exempt from CIL provided that certain criteria are met.
PLEASE NOTE: where a development is exempt from CIL, an application to claim the exemption must be made to the Local Planning Authority.
There are also reliefs (and partial reliefs) available for charitable institutions, social housing and self-builds.
Who is liable to pay CIL?
The person who is liable to CIL is the person who “assumes liability” to pay CIL. To assume liability, an ‘assumption of liability notice’ is submitted to the Local Planning Authority. Assumed liability can be withdrawn at any time before development commences or it can be transferred to another person after development has commenced.
Where no one has assumed liability, the liability for CIL will be apportioned between all parties who have a material interest in the land at commencement of development. Therefore, if you are a landowner and development is commenced prior to completion of the sale or you enter into a joint venture with a developer, you should ensure that you establish who is to be liable for CIL and if it will be the developer, then you will need to ensure that they submit the assumption of liability notice and that they do not withdraw this before development is commenced.
The above is intended as a brief guide to CIL, and should not be relied upon as specific legal advice
If you require further advice regarding how CIL may affect your development or any other Real Estate matter, please contact Claire McSorley in our Real Estate department. You can also email your query to claire.mcsorley@herrington-carmichael.com, call 01276 686222 or visit https://www.herrington-carmichael.com/.
This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter.
