Community infrastructure levy (CIL) procedures trap developers

The High Court has reinforced the message to all those involved in development that strict compliance with procedure is essential in order to enjoy the benefits of any exemptions or other beneficial treatment under the Community Infrastructure Levy (CIL) Regulations.

A developer seeking to build his own new home in Shropshire had hoped to reduce his CIL liability from £36,861.43 to zero by invoking the self-build exemption available under the Regulations. His failure to serve the required Commencement Notice in a form which was compliant with the Regulations led to the total loss of the exemption, with the resultant liability to pay the full CIL bill.

Follow the regulations

The message is clear, follow the Regulations strictly, keeping to the strict deadlines and using the approved forms of notice where they are prescribed, otherwise Community Infrastructure Levy will be applied without the benefit of any exemptions, without any phasing and, moreover, surcharges will be levied for non-compliance. A desire to “get on with it” often means work on a site is commenced in a hurry without proper regard to procedural matters (eg satisfaction of planning conditions). Ignoring the CIL regulations make such decisions even more costly.

This case follows rapidly on from another decision giving rise to exposure to CIL in Camden where a limited commencement of development under a pre-CIL planning permission for residential conversion of an office building was considered insufficient to establish a lawful residential use upon which to base an exemption from CIL for a subsequent revised form of development.

Town and Country Planning Act 1990

Section 56(1) of the Town and Country Planning Act 1990 provides that development under a planning permission allowing both (a) operations and (b) a change of use is commenced when the first of those things occurs. However, this was insufficient to allow the site to qualify as having a lawful residential use under the CIL Regulations. Despite the development having commenced, the property remained in a condition which could not be used for residential purposes because the building remained a mere shell without the necessary facilities. The impact of the decision that there was no lawful residential use cost the developer £547,500.00 in CIL.