Here we discuss the Community Infrastructure Levy (CIL). If you are a developer, land or property owner CIL is a new cost that could affect you. Read on to find out how CIL may impact on you and what you can do…

The Community Infrastructure Levy (CIL) is a new planning charge, introduced by the Planning Act 2008.  It came into force on 6th April 2010 through the Community Infrastructure Regulations 2010.  Development may be liable for a charge under the CIL if your local planning authority has chosen to set a charge in its area.

Who can charge the levy?

The charging Authorities are district and metropolitan councils, London borough councils, unitary authorities, national park authorities, The Broads Authority and the Mayor of London.

What is the levy for?

The levy will help pay for the infrastructure required to support new development.  This includes transport schemes, flood defences, schools, hospitals, other health and social care facilities, parks, green spaces and leisure centres.

A proposed amendment to the Localism bill tabled on 5th July 2011 in the House of Lords seeks to alter the purpose of the levy.  The amendment states that the purpose of CIL is to ensure that “owners and developers of land make a financial contribution to support communities in the area in which their development is situated, including the provision of infrastructure, and the building, improvement and renovation of housing.” The Government will consult on the proposed amendments to the CIL Regulations this Summer.

What development is subject to a charge?

All buildings that people normally use will be liable to pay the levy.  Any new build (new building or an extension) is liable to pay the levy if it has 100 m2 or more of gross internal floorspace, or involves the creation of one dwelling (even when it is below 100 m2.)  Any redevelopment proposals will only pay the levy on any additional floorspace created, taking into account previous floorspace and any demolition taking place as part of the development.

The levy can also be charged on development that does not require planning permission.

How will the levy be charged?

The levy will be charged in £’s per square metre on the net additional increase in floorspace of any given development.

The levy rates should be based on evidence of the infrastructure needed.  The charging authority can identify indicative infrastructure projects and the gap in the funding of these projects.  This should be balanced against viability in a given area.

The levy is chargeable upon commencement of development, although this can be by installments if the charging authority has an installments policy.

Relief from paying the levy

The CIL regulations provide a limited number of types of relief from paying the levy, if they meet the conditions set out within the regulations.  These are a charity landowner, on the portion of the development to be used for charitable purposes, and social housing.

CIL & Planning Obligations

The levy is intended to provide infrastructure to support the development of an area rather than to make individual planning applications acceptable in planning terms. As a result, there may still be some site specific impact mitigation requirements without which a development should not be granted planning permission. Some of these needs may be provided for through the levy but others may not, particularly if they are very local in their impact. Therefore, the Government considers there is still a legitimate role for development specific planning obligations to enable a local planning authority to be confident that the specific consequences of development can be mitigated.

Process for charging the levy

Local Authorities must set a charging schedule.  There is a consultation requirement for the charging schedule, and the schedule will be independently examined as with other Development Plan Documents.  There is also a requirement for the charging schedule to be renewed annually.  Authorities also have to set out on their website what they intend to use CIL for.

The Department for Communities & Local Government announced the CIL Front Runners Project in January 2011 and invited councils to submit bids to take part.  Eight CIL frontrunners were announced in March 2011, and a further twenty were announced in June 2011.

If you are a developer, land or property owner CIL is a new cost that could affect you. For free advice on CIL and how it could impact on you, and what you can do about it, call Claire on 01282 872570, or send Claire your questions by email, and we will get straight back to you.



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