CIL – Frequently Asked Questions
What are the benefits of the Community Infrastructure Levy?
The Government has decided that a tariff-based approach provides the best framework to fund new infrastructure. CIL is considered to be fairer, faster, more certain and transparent than the current system of planning obligations which are generally negotiated on a ‘case-by case’ basis. Levy rates provide much more certainty ‘up front’ about how much money developers will be expected to contribute. Statistics show that under the system of planning obligations only six per cent of all planning permissions nationally (usually the largest schemes) brought any contribution to the cost of supporting infrastructure. Through CIL, all but the smallest building projects will make a contribution towards additional infrastructure that is needed as a result of development.
What is infrastructure?
Infrastructure which can be funded by the levy includes schools, transport, green infrastructure, flood defences, community and other health and social care facilities. This definition allows the levy to be used to fund a very broad range of facilities such as play areas, parks and cultural and sports facilities and gives communities flexibility to choose what infrastructure they need. The Levy can be spent on ‘the provision, improvement, replacement, operation or maintenance of infrastructure’.
What is the relationship between CIL and planning obligations?
Planning obligations (funding agreements between the local planning authority and the developer) will continue to play an important role in helping to make individual developments acceptable. The CIL is intended to provide infrastructure to support the development of an area rather than to make individual planning applications acceptable in planning terms. Some developments will still require site specific mitigation with regard to affordable housing, highways and landscaping, which will need to be secured through planning obligations.
What development is liable for CIL?
A development is liable to pay CIL if it is creating new floor space of over 100 sqm, or if it is creating a dwelling or annex either via conversion or new build. The SDNPA’s CIL Charging Schedule charges CIL for residential development (including rural workers’ dwellings and holiday accommodation) and large format retail, while all other development is set at a rate of £0 (Zero).
Social housing, charitable and self-build developments can apply for an exemption from CIL. For more detail see the SDNPA CIL Charging Schedule. Charges will be calculated based on the Gross Internal Area according to a set per m2 tariff.
Where primary accommodation is being provided in an outbuilding, or where there is clearly scope for the building to function as a separate unit of accommodation without the need for a further planning application to be submitted (i.e where there is enough space for kitchen facilities or a shower to be installed despite them not necessarily being shown on the plan), then for the purposes of calculating CIL the SDNPA will determine the outbuilding to be an annex.
Development will be liable to pay CIL if:
- It is a building which people go into to use
- The gross internal area of the new build or residential extension will be more than 100 sqm
- One or more new dwellings are created, even where the new build floors pace is less than 100 sqm
Development will not be liable to pay CIL if it:
- Is a structure or building into which people do not usually go
- It is a change of use with no additional floor space (if no new dwellings are created), and subject to Regulation 40 whereby the floor space is offset if it has been in lawful use, for a period of at least 6 months without a break in the past 3 years (the 3 year period ending on the day planning permission first permits the development)
- Is a change of use from a single dwelling to two or more separate dwellings
- Is social housing, or will be used for charitable purposes, or is a self-build (in these circumstances exemption is not automatic and must be applied for, and is subject to a claw back period)
Do residential extensions or annexes have to pay CIL?
People who extend their own homes or erect residential annexes within the grounds of their own homes can apply for exemption from CIL provided that:
- The main dwelling must be the self-builder’s principal residence (and they must have a freehold, or leasehold of at least seven years beyond the date which planning permission for the development was granted), and
- The annex is built within the curtilage of the principal residence and comprises one new dwelling, or
- The extension is an enlargement of the principal residence and does not comprise an additional dwelling
Residential extensions of less than 100 sqm are already exempt from CIL under the minor development exemption.
If an application is submitted before but not determined before CIL is introduced, will CIL be payable?
Yes. Once CIL is in force, it will apply to all eligible development where planning decisions have not yet been made, regardless of any prior Section 106 negotiations. This will also apply to development that has been granted subject to the satisfactory completion of S106 agreements and developments at the appeal stage. This is because the CIL regulations (Regulation 123) prevent S106 being entered into for infrastructure that will be funded by CIL.
Does CIL apply to applications to amend existing permissions?
Yes, assuming that the CIL charges apply to the type(s) of development in question.
Does CIL apply to appeals that are allowed, where the original application was submitted and refused prior to 01 April?
Yes. If your appeal is allowed and the development is a CIL liable development then you will be required to submit the necessary CIL Forms.
What counts as chargeable floor space?
Chargeable Gross Internal Area (GIA) is the area of a building measured to the internal face of the perimeter walls at each floor level. This includes, but is not limited to, corridors, storage, toilets, stairs, lifts and garages. The SDNPA uses the RICS 6th Edition definition of GIA.
Would CIL be chargeable on a conversion (e.g. barn or garage conversion)?
A conversion could be CIL liable unless it can be demonstrated that the building to be converted passes the ‘In Use’ Test. In order for it to pass the Test, evidence of its lawful use, for a period of at least six months without a break in the past three years (the three year period ending on the day planning permission first permits the development), needs to be provided. Evidence may include time-stamped photographs showing the building in lawful use; sworn statements witnessed by a solicitor, of people who can confirm the use claimed; tenancy agreements and utility or other bills relating to the use claimed. Business Rates or Council Tax bills will only be accepted as evidence of lawful use where it is accompanied by an additional form of evidence. If the building to be converted has not been in lawful use then the floor space will not be offset from the CIL liability.
Who is liable to pay the levy?
The responsibility to pay the levy rests with the owner of land on which the liable development will be situated. Although liability defaults to the landowner, the Regulations recognise that others involved in a development may wish to pay. To allow this, anyone can come forward and assume liability for the development.
How will local neighbourhoods benefit from CIL?
The CIL Regulations 2010 (as amended) state that 25% of CIL funds collected from a development will be passed directly to the parish council in which the development is located, if there is an adopted Neighbourhood Plan in place. The amount is reduced to 15% (capped at £100 per existing house) in areas without an adopted Neighbourhood Plan. The funds are to be spent on infrastructure projects of their choice.
How will CIL respond to factors such as inflation?
In calculating individual charges for the levy, charging authorities will be required to apply an annually updated index of inflation to keep the levy responsive to market conditions. The SDNPA’s CIL calculator takes this into account.
Is there a mechanism for the CIL to be spent outside of the charging authority?
Charging authorities may pass money to bodies outside their area to deliver infrastructure which will benefit the development of their area, such as the Environment Agency for flood defence.
How is the levy collected and can it be paid in instalments?
The levy’s charges become due from the date of commencement of a chargeable development. When planning permission is granted, the SDNPA will issue a Liability Notice setting out the amount of the levy and the payment procedure. It can be paid in instalments as set out in the SDNPA CIL Instalment Policy.
How will payment of the levy be enforced?
The levy’s charges are intended to be easily understood and easy to comply with. Most of those liable to pay the levy are expected to pay their liabilities without problem or delay. However, where there are problems in collecting the levy, charging authorities will have the means to penalise late payment. In cases of persistent non-compliance the regulations also enable collecting authorities to consider more direct action such as the issuing of a CIL Stop Notice or applying to the courts for seizure of assets to pay the outstanding monies or for custodial sentences.
How will the levy be spent?
Charging authorities are required to spend the levy’s revenue on what they see as the infrastructure needed to support the development of their area. The assessment of ‘need’ will largely be informed by the Infrastructure Delivery Plan (IDP) published by each authority alongside their Local Plan. The levy is intended to focus on the provision of new or improved infrastructure and should not be used to remedy pre-existing deficiencies unless those deficiencies will be made more severe by new development.
Unlike contributions collected through S106 agreements there is no time constraint for the spending of monies collected through CIL.
Will affordable housing be liable for CIL?
Affordable housing, including shared ownership, is residential development so it is liable to pay the CIL. However, it is eligible for 100% relief from CIL, providing it remains as social housing for a period of seven years, beginning with the date on which the qualifying dwelling is first let. If the housing ceases to remain as social housing within seven years the full amount of CIL will become due.
How will CIL be monitored?
To ensure that the levy is open and transparent, charging authorities must prepare short reports on the levy for the previous financial year which must be placed on their websites by 31 December each year. These reports will set out how much revenue from the levy has been received, what it has been spent on and how much is left. This report will be within the Authority’s Monitoring Report (AMR).
Please email us at firstname.lastname@example.org for all CIL related enquiries including planning applications that might attract a CIL payment, the Infrastructure Delivery Plan and infrastructure projects.