Robin Sharp discusses the latest changes to the Community Infrastructure Levy.
The latest round of amendments (the eighth…) to the Community Infrastructure Levy came into force on 1st September 2019.
Notable changes are:
The new regulations remove the restrictions on the pooling of s106 obligations. Previously authorities were barred from utilising more than 5 separate s106 planning obligations to fund single infrastructure projects. This has been removed with the aim of enabling flexibility.
Additionally, the requirement to publish a list of projects under which CIL would be spent/ allocated under the old Regulation 123 has now been abolished. Instead local authorities now must provide an annual infrastructure funding statement setting out what infrastructure it intends may be wholly or partly funded by CIL (which is a fairly wide definition…)
Potentially the combination of these changes could increase the risk of authorities using funds from both s106 and CIL for the same infrastructure, so developers essentially might be charged twice for the same thing.
CIL reliefs granted on planning consents can now be carried forward into a subsequent s73 application.
The calculations for CIL on such applications vary depending on whether the application results in no change, an increase, or a decrease in floorspace. Previously CIL was chargeable on the whole of the development at the rate of CIL and indexation in force at the date of the s73 permission. Thus if a charging schedule was adopted with a higher rate of CIL in the period between the grant of the original consent and the date of grant of the s73 permission then the higher rate of CIL (and indexation) was potentially chargeable on the whole development even if there was only a small increase in floorspace.
These must now ‘fairly and reasonably relate in scale and kind to the development’ and should not exceed the estimate of actual monitoring costs over the lifetime of the particular obligation. Opportunity exists therefore to challenge any unreasonable monitoring costs suggested.
The penalty for failing to submit a commencement notice has given rise to controversy. In a number of well publicised cases developers have lost their entire exemption for failing to submit the proper form in advance of starting works. The new regulations now change the penalty to a level of 20% of the CIL amount with a cap at £2,500.
NB: If planning permission was granted prior to 1 September 2019, or it is intended to apply for a relief or exemption from CIL in respect of a levy issued prior to this date, then the changes introduced by the 2019 Regulations will not apply. The government’s own guidance highlights that failure to submit a commencement notice before starting works on site will continue to result in the loss of the relief or exemption. For more information, contact our commercial property department or email email@example.com