CIL was conceived as a simple 'flat tax' where an index linked £/m2 rate was applied to all new development.
That is the case on many occasions - but the structure and meaning of the reguations are labyrinthian and it is easy to trip up.
Here is our easy guide to the rules:
The chargeable area is the total area of development LESS the area of
‘In use buildings’which contains a part that has been in lawful 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 chargeable development
Or
‘Retained parts’where the intended use following completion of the chargeable development is a use that is able to be carried on lawfully and permanently without further planning permission in that part on the day before planning permission first permits the chargeable development;
Both these credits are determined at the date permission is granted and are lost if the building is demolished at that date (so never demolish your building prior to obtaining planning consent)
LESS ANY Exemptions and reliefs
Exemptions are provided for Minor Development, residential annexes and extensions and buildings used by Charities.
Reliefs are provided for social housing, Self-build Housing.
It is essential to claim these exemptions and reliefs are claimed and receive an acknowledgement before you start any type of activity on site.
These reliefs can be lost if you depart from your planning permission without obtaining a new planning permission.
LESS any Abatements
Abatements enable developers to pay for only additional areas where an S73 application (not S73A retrospective permissions) and successive ‘in CIL’ planning applications are granted.
Readers should note that where a pre CIL permission is held with zero liability, a subsequent post CIL permission will not enjoy any credit by virtue of the earlier permission.
There are strict requirements to serve notices!
Liability Notices
The collecting authority must issue a liability notice as soon as practicable after the day on which a planning permission first permits development.
If you disagree with the liability notice you should ask for a review within 28 days – and appeal within 60 days.
The charging authority must issue a revised liability notice if the chargeable amount changes, hence if the liability notice is wrong for any reason, you can ask for it to be amended outside the review and appeal provisions noted above.
Notice of Chargeable Development
Before any development authorised by a general consent (which is to say a development authorised by a Permitted Development) is commenced, a notice of chargeable development must be submitted to the collecting authority in respect of that development.
If you do not provide the commencement notice there is a surcharge of 20% on top of the basic liability or £2500 (whichever is greater must be paid).
Commencement Notice
Where planning permission is granted for a chargeable development, a commencement notice must be submitted to the collecting authority no later than the day before the day on which the chargeable development is to be commenced.
If you do not provide the commencement notice there is a surcharge of 20% on top of the basic liability or £2500 (whichever is greater must be paid).
Demand Notice
The collecting authority must serve a Demand Notice once it has received a commencement notice or as soon as it believes there has been a un-notified commencement on site.
There is a penalty of 20%if not notice of commencement is filed.
The charging authority must issue a revised demand notice if the chargeable amount changes, hence if the demand notice is wrong for any reason, you can ask for it to be amended outside the review and appeal provisions noted above.
Instalment Policies
Each charging authority will have an instalment policy.
Your right to pay by instalments will be lost if you fail to assume liability and serve a commencement notice.
Refunds
Where a person (P) is liable to pay CIL and the amount paid by P proves to be greater than the amount for which P is liable, the collecting authority must, as soon as practicable, repay the overpayment.
Reviews and Appeals
If you disagree with the Chargeable Amount, you can ask the collecting authority to review the calculation within 28 days of the receipt of the liability notice. The collecting authority have 14 days to respond.
If you disagree with the conclusion of the review or receive no answer, you can appeal to the planning inspectorate within 60 days of receipt of the liability notice. You cannot appeal if the chargeable development has commenced and the appeal will lapse if you commence the chargeable development after the appeal is lodged.
Similar provisions apply if your claim for any relief is rejected.
Positive Results:
- Our clients erroneously paid a CIL contribution having failed to realise that they were entitled to a credit for the existing buildings that they were converting. We were able to persuade the collecting authority to issue a revised liability notice and refund £40,000.
- Our clients were served with a liability notice for c£200,000. We were able to produce evidence to show that part of the building had been in use for 6 months in the three years prior to the date permission was granted. – Saving £200,000.
- Our client was served with a liability notice for £260,000 on the grant of a post CIL permission for the conversion of a building to 24 flats. We were persuade the charging authority to deduct the area of the retained buildings which held a Pre CIL planning permission from chargeable area . – Saving £180,000
These changes were achieved by requests to recalculate under regulation 40 rather than under the ‘review and appeal’ procedure noted above.
Cautionary Tales
- Our clients held a pre CIL permission to convert a end of terraced house into 5 flats. At the early stage of construction, it became clear that the building needed to be demolished, and they did so without permission.
On making a new planning application the permission was deemed to be retrospective and granted under S773A T&CPA 1990, and they were charged CIL on the whole new building with no credit for the previous building at all, and no ‘self build’ relief – cost£200,000.
This could have been avoided if work had stopped immediately and a S73 application (amended condition of permission) had been made.
- Our clients held a pre-CIL consent to build a new house with basement. In the constriction process, the basement was built at a greater depth than that permitted by the plans.
On making a new planning application the permission was deemed to be retrospective and granted under S773A T&CPA 1990, and they were charged CIL on the whole new building with no ‘self-build’ relief – cost £180,000
This could have been avoided if the change of plan had been the subject of a S73 application (amended condition of permission).
- Clients were ‘refurbishing’ a bungalow relying on a self-build exemption.
Enforcement officers attended the site and concluded that the refurbishment works had gone beyond refurbishment and were in fact works of partial demolition. The new planning application was deemed retrospective and clients were denied self-build relief because the relevant notices could not be served and acknowledged before commencement.
This could have been avoided if the change of plan had been the subject of a S73 application (amended condition of permission).
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