Community Infrastructure Levy (CIL) - Heald Law
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Community Infrastructure Levy (CIL)

Community Infrastructure Levy (CIL)

CIL is a charge which Local Authorities may impose on developments. The funds raised by CIL are spent on local infrastructure. CIL runs alongside Section 106 obligations. You cannot be charged for the same infrastructure under each scheme.

Although CIL was introduced in 2010, a significant number of Local Authorities have yet to agree and implement a Charging Schedule so CIL may not be relevant for your development depending on where it is. There are currently a number of CIL Charging Schedules which are due to be implemented shortly, so caution should be used and the position regularly checked because a CIL Charging Schedule may be in place by the time your planning permission is granted.

CIL becomes payable when development begins on site but does not only apply to developments which require planning permission, so it has a wider remit than Section 106 obligations. If your intended development is a permitted development and is in an area where a CIL Charging Schedule is in place then be very cautious before doing anything on site as even site investigation works can be deemed to be starting the development and trigger payment of the CIL Liability. If a planning permission is already in place with a CIL Liability then site investigation works will trigger payment of the liability;

It may be possible to negotiate with the Local Authority to accept payment in land or to provide the infrastructure rather than payment in cash. This should provide you with more certainty about when the infrastructure will be delivered. Otherwise, the CIL Liability for a development is calculated on a £ per square metre basis so is not negotiable.

The £ per square metre is different depending on the type of development (residential/offices/industrial etc) and the previous land use (agricultural/brownfield etc). An added complication when calculating the CIL Liability is that if there are buildings in place on the site when planning permission is granted the area of these may be able to be deducted from the CIL Liability, so it may not be in your best interests to demolish buildings on site prior to planning permission being granted. Something else to be aware of when checking CIL rates is that the figure stated by the Local Authority will also need to be index-linked from the date on which the Charging Schedule came into effect.

There are some exemptions and reliefs from CIL Liability but any reliefs MUST be applied for before development commences, otherwise a full CIL Liability payment will become due.

By default, the landowner is liable to pay any CIL. If another party is to pay the CIL then an Assumption of Liability Notice should be served on the Local Authority before the development is commenced, therefore, before payment of the CIL is triggered. While a planning permission remains live, the liability to pay any CIL remains attached to the land, so passes to each and every landowner on a sale or grant of a lease. Any notices to be served within the CIL process have significant consequences so they should be prepared and served by a solicitor or a planning professional.

As you can see CIL is not a straightforward area of your development but is something which must be considered when first looking at the financial viability of a site for development. If you wish to discuss how CIL may affect your intended development, please contact  Caroline Wilton 01908 662277