The Community Infrastructure Levy is a new planning charge, introduced by the Planning Act 2008. It came into force on 6 April 2010 through the Community Infrastructure Levy Regulations 2010. Development may be liable for a charge under the Community Infrastructure Levy (CIL), if your local planning authority has chosen to set a charge in its area.
The government is consulting on further regulatory reforms to the Community Infrastructure Levy. The consultation covers a range of amendments to the regulations, related particularly to rate setting and the operation of the levy in practice. The consultation closed on 28 May 2013. Further details can be found at on the Gov.uk website.
The Community Infrastructure Levy charging authorities (charging authorities) in England will be district and metropolitan district councils, London borough councils, unitary authorities, national park authorities, The Broads Authority and the Mayor of London. In Wales, the county and county borough councils and the national park authorities will have the power to charge the levy.
In London, the boroughs will collect the Mayor’s levy on behalf of the Mayor.
Most buildings that people normally use will be liable to pay the levy. But buildings into which people do not normally go, and buildings into which people go only intermittently for the purpose of inspecting or maintaining fixed plant or machinery, will not be liable to pay the levy. Structures which are not buildings, such as pylons and wind turbines, will not be liable to pay the levy.
Any new build – that is a new building or an extension – is only liable for the levy if it has 100 square metres, or more, of gross internal floor space, or involves the creation of one dwelling, even when that is below 100 square metres.
While any new build over this size will be subject to CIL, the gross floorspace of any existing buildings on the site that are going to be demolished may be deducted from the calculation of the CIL liability. Similarly the gross floorspace arising from development to the interior of an existing building may be disregarded from the calculation of the CIL liability. The deductions in respect of demolition or change of use will only apply where the existing building has been in continuous lawful use for at least six months in the 12 months prior to the development being permitted.
The Community Infrastructure Levy must be levied in pounds per square metre of floorspace arising from any chargeable development. The charge will be applied to the gross floorspace of most new buildings or extensions to existing buildings.
The Community Infrastructure Levy will not normally be charged on the floorspace resulting from a change of use or any floorspace lost through the demolition of buildings as part of a development. Deductions in respect of the demolition or the change of use of existing buildings will only apply where the existing building has been in continuous lawful use for at least six months in the 12 months prior to the development being permitted.
The trigger is commencement of development, though payment may be made in instalments if the charging authority has a payment by instalments policy.
The money can be used to fund a wide range of infrastructure that is needed as a result of development. This includes transport schemes, flood defences, schools, hospitals and other health and social care facilities, parks, green spaces and leisure centres.
The levy Charging Authority must produce an annual report for the financial year detailing the total receipts for the reported year, total expenditure and a summary of the items of infrastructure to which these receipts were applied.
Further information on the Community Infrastructure Levy can be found in these associated documents
The introduction of the levy means that charging authorities require additional information to determine whether a charge is due and to determine the amount.
Applicants will therefore be required to answer additional questions to enable authorities to calculate levy liability. These questions are found in the document below, which should be submitted alongside the planning application form.
Once planning permission is granted, collecting authorities will issue applicants with a levy liability notice. Applicants should then assume liability to pay the levy charge prior to commencement of development by sending a completed assumption of liability form (‘Form 1: Assumption of Liability’) to the collecting authority.
A liable party who subsequently wishes to withdraw or transfer their liability must complete either ‘Form 3: Withdrawal of Assumption of Liability’ or ‘Form 4: Transfer of Liability’ and send this to the collecting authority.
The levy charge becomes due when development commences. A commencement notice must be issued to the collecting authority (Form 6: Commencement Notice’) and all owners of the relevant land to notify them of the intended commencement date of the development. The collecting authority will then send a Demand Notice to the person or persons who have assumed liability.
Development commenced under general consent is liable to pay CIL. 'General consent' includes permitted development rights granted under the General Permitted Development Order 1995. If you intend to commence development under general consent you must submit a Notice of Chargeable Development (Form 5) to the local authority before you commence this development. The only exception to this requirement to submit a Notice of Chargeable Development is if the development in question is less than 100 square metres of new floorspace and the development does not comprise one or more new dwellings. If the development meets these criteria a Notice of Chargeable Development does not have to be submitted before the commencement of development.
Relief from the levy is available in three specific instances.
First, a charity landownder will benefit from full relief from their portion of the liability where the chargeable development will be used wholly, or mainly, for charitable purposes. A charging authority can also choose to offer discretionary relief to a charity landowner where the greater part of the chargeable development will be held as an investment, from which the profits are applied for charitable purposes. The charging authority must publish its policy for giving relief in such circumstances.
Secondly, the regulations provide 100% relief from the levy on those parts of a chargeable development which are intended to be used as social housing.
A social housing relief calculator has been developed that will assist you to calculate this relief.
Exceptional circumstances relief is only available where a charging authority has made it available in their area. Claims from landowners will only be considered on a case by case basis, provided the following three conditions are met.
Firstly, a section 106 agreement must exist on the planning permission permitting the chargeable development.
Secondly, the charging authority must consider that the cost of complying with the section 106 agreement is greater than the levy’s charge on the development and that paying the full charge would have an unacceptable impact on the development’s economic viability.
An assessment of this must be carried out by an independent person with appropriate qualifications and experience. The person must be appointed by the claimant and agreed with the charging authority.
Finally, any relief the charging authority chooses to give must not constitute a notifiable state aid.
If you wish to apply for exemption or relief, please use ‘Form 2: Claiming Exemption or Relief’ below.
The forms mentioned above are available here:
If you have any legislation or policy questions about the Community Infrastructure Levy you can contact the Department for Communities and Local Government:
