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 facilities 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?
Both residential and large format retail developments in the SDNPA will be liable for CIL. Social housing, charitable and self-build developments can apply for an exemption to 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.
Development will be liable to pay CIL if:
– it is a building which people go into to use
– and the gross internal area of the new build/extension will be more than 100 m2
– one or more new dwellings is created, even where the new build floorspace is less than 100 m2
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 floorspace (if no new dwellings are created), and subject to Regulation 40 whereby the floorspace is discounted only if it was in lawful use for at least 6 months out of the last 3 years
-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 clawback 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 (exemption is not automatic), 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 100m² 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.
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 corridors, storage, toilets, stairs, lifts and garages. The SDNPA uses the HMRC Valuation Office Agency’s definition of GIA.
Would CIL be chargeable on a conversion (e.g barn or garage conversion)?
Potentially, it could be CIL liable unless it can be demonstrated that it passes the ‘Vacancy Test’ to discount the liability. The Vacancy Test means that a building must have been in lawful use for at least a six month period in the previous three years.
Who is liable to pay the levy?
The responsibility to pay the levy rests with the ownership of land on which the liable development will be situated. Although liability rests with 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 SDNP’s CIL calculator takes this into account.
Does CIL apply to applications to amend existing permissions?
Yes, assuming that the CIL charges apply to the type/s of development in question.
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/shared ownership 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 the CIL, providing it remains as social housing for a period of seven years from commencement (but this exemption is not automatic, and must be applied for). If the housing ceases to remain as social housing within seven years the CIL will be liable.
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 31st 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.