What Is the Community Infrastructure Levy (CIL)?
The Community Infrastructure Levy (CIL) is a planning charge introduced by the Planning Act 2008. It allows local authorities in England and Wales to raise funds from new development to help deliver the infrastructure needed to support community growth.
For developers, landowners and homeowners, understanding when CIL applies, and how it is calculated, is an important part of the development process.
When would I be liable to pay CIL?
CIL is charged on the net increase in gross internal area (GIA) of a development, measured in square metres (sqm). In simple terms, if a proposal does not result in additional floorspace, CIL will not usually be payable.
For example, internal alterations that do not increase the GIA of a building would not attract CIL. However, where a development includes new floorspace, such as the construction of a new dwelling or a sizeable extension, CIL is likely to be triggered. In the case of a new house, CIL would normally be calculated on the full GIA of the dwelling.
How is CIL calculated?
CIL is a fixed, non-negotiable charge set by each local authority. Where adopted, councils publish a CIL Charging Schedule which sets out the applicable rates, usually expressed as a cost per square metre of new floorspace.
There is no single national rate. Charges vary between authorities and can also differ depending on the type, scale or location of development. Residential development, for example, may attract a different rate to retail or commercial schemes, and some areas may be zero-rated.
Can the charge be negotiated?
No. Unlike other planning-related financial contributions, such as Section 106 agreements, CIL rates are fixed and cannot be negotiated as part of the planning process. Once liability is established, the charge is payable in accordance with the adopted charging schedule.
What is CIL used for?
Funds collected through CIL are intended to help fund infrastructure required to support development in the area. This can include improvements to transport networks, new or expanded schools, healthcare facilities, public open space and other community infrastructure.
A proportion of CIL receipts is also passed directly to local town or parish councils, ensuring that development contributes to infrastructure at a neighbourhood level.
How do I know how much I need to pay and when?
At the planning application stage, most local authorities that have adopted CIL require the submission of a CIL Additional Information Form. This provides details such as the type of development proposed, existing floorspace on the site and whether any exemptions or reliefs may apply.
Once planning permission is granted, the local authority will issue a CIL Liability Notice. This sets out the total amount payable, how the charge has been calculated and the timetable for payment. Payment is usually required on commencement of development, although some authorities allow phased payments for larger schemes.
It is important to note that procedural steps, such as submitting an Assumption of Liability Notice and a Commencement Notice, must be completed correctly. Failure to do so can result in surcharges or the loss of any applicable exemptions.
When might I be exempt from CIL?
Certain types of development may be eligible for exemption or relief from CIL. Common examples include residential extensions under 100 sqm and self-build housing. In these cases, strict criteria apply and the relevant exemption forms must be submitted and approved before development starts.
Because exemptions are applied through a formal process, early advice is strongly recommended to avoid unexpected liability.
How can we help?
Once you have been provided with your Liability Notice, we will be able to undertake a either a Development Appraisal or a Residual Land Valuation to help determine the impact the notice will have on achievable profit at the end of the development, as well as the land value when introducing this cost to the Development.
