CIL or Community Infrastructure Levy
The CIL is a new charging method for developments to support local infrastructure that was outlined in Part 11 of the Planning Act 2008 and subsequently particularised and enacted in the Community Infrastructure Levy Regulations 2010 which came into force 6th April 2010.
Section 128 of the 2010 regulations says where planning permission is granted for development by way of a general consent, liability for CIL does not arise in respect of that development if it is commenced before 6th April 2013 or on the day on which it was commenced; it is situated in an area in which no charging order schedule is in effect.
How does CIL affect residential Property?
For the majority of home owners CIL will not be an issue. Section 42 of the 2010 Regulations exempts minor development. If on completion of a development, the gross internal area of a new build area on the land will be less than 100 square metres, there is no liability for CIL. Most residential household extensions, annexes or works are unlikely to attract liability for CIL due to this size exemption.
This exemption does not apply if the development will result in one or more new dwellings.
Section 42A of The Community Infrastructure Levy (Amendment) Regulations 2014 provides exemptions for annexes and extensions by owners that use the property as their sole or main residence (as long as it does not result in a new dwelling).
Self-builders of residential Properties can also rest easy as they are entitled to relief/exemption under Section 54A of The Community Infrastructure Levy (Amendment) Regulations 2014. However they do need to apply to the collecting authority to obtain this relief/exemption. Failure to do so may mean the CIL is payable in full.
What does it mean if I see a CIL notice or Land Charge for CIL on the local search?
The existence of a CIL schedule will usually be revealed on most local searches, as most local authorities will wish to put a charging schedule in place. The existence of any affirmative answers for the existence of notices in relation to CIL should prompt further enquiries to be made. It is likely that, for residential property conveyancers, CIL will only ever be encountered for new build properties. In such a situation potential CIL liability is similar to financial obligations set out in S106 agreements. With S106 agreements you should usually seek confirmation that the obligations have been discharged, are not passed onto successors in title, or that the limitation period for enforcement of debts arising under S106 agreements has passed so that the plot purchaser will not be liable for any unpaid sums. S8 of the Limitation Act 1980 sets out a limitation period of 12 years for an action arising upon specialty (a deed).
For a CIL liability, as explained below under “Default Notices”, if the collecting authority cannot recover CIL amounts due they can seek recovery from land owners. Just like S106 agreements then, confirmation that liability is discharged should be sought. The limitation period for an action arising from statute is set out in Section 9 of the Limitation Act 1980, being 6 years from the date of the cause of action. The cause of action for CIL being the dates when the payments for CIL are due, the payment periods for CIL are set out in Section 70 of the 2010 Regulations.
As with any debt there is always the potential that the limitation period may be deemed to run from a later date if efforts to chase the debt are made, so it is always better to check any potential CIL or S106 financial obligation liability is discharged rather than rely on the dates revealed in searches.
Local Search CIL
The CON29 standard questions for local searches were amended in 2016 to include question 3.10 which asks about the Community Infrastructure Levy.
3.10. Community infrastructure levy (CIL)
- Is there a CIL Charging Schedule?
- If, yes, do any of the following subsist in relation to the property, or has a local authority decided to issue, serve, make or commence any of the following:-:
- A liability notice?
- A notice of chargeable development?
- A demand notice?
- A default notice?
- An assumption of liability notice?
- A commencement notice?
- Has any demand notice been suspended?
- Has the Local Authority received full or part payment of any liability?
- Has the Local Authority received any appeal against any of the above?
- Has a decision been taken to apply for a liability order?
- Has a liability order been granted?
- Have any other enforcement measures been taken?
The complete set of forms required when dealing with CILs is available from the Planning Portal Website here: https://www.planningportal.co.uk/info/200126/applications/70/community_infrastructure_levy/5
A liability notice is to be served by the ‘collecting authority’ as soon as practicable after the day on which a planning permission first permits development. A template notice of liability is available from the planning portal website here.
Section 65 of The Community Infrastructure Levy Regulations 2010 sets out the main points for the liability notice. Simply put, the liability notice will set out details such as the chargeable amount due and when it should be paid. This notice will be sent to the person or persons jointly, liable for the charge.
A Notice of Chargeable Development
A Notice of chargeable Development applies where development is granted by way of a “general consent”. General consent is defined in Section 5(3) of the Regulations.
Before a development granted by a general consent is commended, a notice of chargeable development must be submitted to the collecting authority using a form made by the Secretary of State or one substantially similar together with any plans, drawings or photographs to identify the relevant land, buildings to be demolished and chargeable development. A copy of the form is available from the planning portal website here.
If a Notice of Chargeable Development is not submitted before development is commenced, the collecting authority may impose a surcharge equal to 20 per cent of the chargeable amount payable in respect of the development or £2500, whichever is the lower amount.
The collecting authority must serve a “demand notice” on each person liable to pay CIL. A template demand notice is available from the planning portal website here.
Where a person assumed liability to pay the CIL and the collecting authority is unable to recover an amount of CIL payable, the collecting authority may determine that liability to pay the amount of CIL payable is transferred to the owners of the land. The collecting authority must first “use all reasonable effect to recover the amount of CIL payable using one or more of the provisions in Chapter 3 of Part 9 of the 2010 Regulations.
The methods available for recovery of CIL are: –
- Liability Order
- Committal to Prison (only where the debtor is an individual, an attempt to levy by distress was unsuccessful, the authority can demonstrate they are unable to recover the levy by way of charging order and the court is satisfied that the failures to pay the debt is due to the debtor’s wilful refusal or culpable neglect).
- Charging Order
- Enforcement of a local land charge (only if the sum due is £2000 or greater)
Assumption of Liability Notice
If a person wishes to assume liability to pay CIL they may submit an assumption of liability notice. A form for this is available from the planning portal website here.
Where planning permission is granted for a chargeable development, a commencement notice must be submitted to the collecting authority. A form for this notice may be found on the planning portal website here.