2. CIL “Non-negotiable” Tax
CIL is a locally set tax “levy” on land introduced under the Growth and
Infrastructure Act 2008. The operation of the levy, including calculation of the
levy payable, is prescribed by the Community Infrastructure Levy Regulations
2010 (as amended). The most recent regulatory changes were introduced in
Amendment Regulations published in February 2014.
CIL does not replace S106 obligations: under CIL Regulation 122(2) these may
still be payable in addition to CIL where the planning obligation is:
a) necessary to make the development acceptable in planning terms;
b) directly related to the development; and
c) fairly and reasonable related in scale and kind to the development
CIL is only paid on net increases in floor space provided that any building(s)
on site remain “in-use” in accordance with Regulation 40; i.e. lawfully
occupied for a continuous period of 6 months in the 36 months ending on the
date planning permission is granted.
3. CIL- All Stages Map of England & Wales
Savills - http://www.savills.co.uk/promotions/cil-map.aspx
6. Source: Savills (as at 2nd March 2015)
Progress on CIL Implementation (England & Wales)
57
57
32
48
50
45
38
25
0 10 20 30 40 50 60
Implemented
Submitted for examination/examination
closed
Draft Consultation
Preliminary Draft Consultation
Preparing evidence/Charging Schedule
Committed but not started
Not yet committed
Not pursuing
16%39%27%18%
DoneInprocessEngagedNotengaged
Number of Local Authorities
7. Projections on number of implemented CILs
April 2015 Deadline
Source: Savills (February 2015)
10. Mayoral CIL- Facts & Figures
£70.2m
collected since
April 2012
£300m
target by
2019
Six London
Boroughs
made up
52% of CIL
receipts
Source of funding for
Crossrail, approximately 2%
of total cost
Exceeded projections –
two years ahead of
projections
Outperformed
Section 106
contributions
which have raised
less funds than
forecast
11. There are trade-offs between the
viability of CIL, Section 106 and
affordable housing policy
Source: Savills
0
10,000
20,000
30,000
40,000
50,000
150 175 200 225 250 275 300 325 350
ViablelevelofCILandSection106(£perplot)
New homes sales value (£ per sq.ft.)
0%
10
%
20
%
30
%
40
%
50
%
Affordabl
e housing
12. Local Context Needs to be Considered
• Historic delivery
• Historic Section106 achievement
• Local Plan policy costs
• Benchmark land value
• Land supply characteristics and profile
Viability Buffer
14. Policy choices have a cumulative
impact on viability
Source: Savills
Local policies must be
assessed to establish an
appropriate Benchmark Land
Value
15. Avoiding ‘Double Dipping’
• Explicit policy on the balance between Section 106 and CIL
– Draft regulation 123 list – what will be excluded from Section 106 funding?
– Does the Regulation 123 list support the delivery of the Plan?
– The proposed changes to the regulations will tighten the restriction on pooling
of Section 106
– Flexible to give Charging Authorities scope to change what CIL is spent on
• Must be allowed for within the viability appraisals
17. What are the implications?
• LPAs need to consider the impact of the April
2015 restrictions on the delivery of
infrastructure in their area
• Developers and housebuilders should work
with LPAs to identify key pieces of
infrastructure that are needed for the delivery
of housing sites
• Section 106 agreements should refer to
specific named projects
• Further guidance from Ministers is essential to
ensure that LPAs have a sufficient Section 106
mechanism in place post-April 2015, as failure
to do so will have a significant impact on the
delivery of both infrastructure and housing.
18. CIL Checklist (Ten Key Points)
Source: Savills
CIL is a non-negotiable tax. This is very different to the provision of Section 106 obligations,
which are a policy requirement and potentially subject to negotiation, particularly in respect
of viability. It is therefore essential that the following is considered on all development sites
where a Charging Schedule has been, or is about to be, implemented.
• Failure to pay is a criminal offence: Once a Liability Notice is served it is
the responsibility of the landowner or appointed party to pay CIL.
• Off-setting is subject to the “lawful occupation” test: To be off-set, a part
of each existing building must have been in continuous lawful occupation
for a minimum of 6 months out of the 36 months preceding the grant of
planning permission. The relevant buildings must therefore still be
standing on the day that planning permission is granted.
• CIL is liable for chargeable development triggered by Planning Consent:
The trigger for CIL is the grant of a planning permission. This means that
schemes submitted for planning, prior to CIL implementation, may still be
liable for CIL, dependent on the timing of the decision. This should be
factored in scheme appraisals and valuations.
19. CIL Checklist
Source: Savills
• Failure to pay is a criminal offence: Once a Liability Notice is served it is
the responsibility of the landowner or appointed party to pay CIL.
• CIL is index-linked: All CIL rates are index-linked from the date that the
Charging Schedule is implemented. It is therefore important that the
correct index figures are used when calculating CIL liability in accordance
with Regulation 40. The Index date is 1st November. The CIL calculation is
triggered on the date of planning permission.
• CIL is payable on commencement of development: The timing and
amount of these CIL payments may be subject to the Charging Authority’s
Instalments Policy. Where there is no instalments policy, CIL is payable in
full 60 days after the commencement of development. For phased outline
applications, each phase of a development may be charged separately.
• Exemptions and reliefs must be applied for and approved prior to
commencement: A number of exceptions or reliefs are available which
may reduce the CIL liability (for example social housing, self build housing,
or charitable relief). Some are compulsory; others are offered at the
Charging Authority’s discretion and you should check the Charging
Schedule.
20. CIL Checklist
Source: Savills
• CIL does not replace Section 106: Affordable housing and site specific mitigation
obligations remain matters that can be secured with planning obligations under
Section 106. CIL Regulations 122 and 123 impose a restriction to limit the pooling
of contributions in planning obligations in Section 106 when CIL is implemented,
or from the 6th April 2015, whichever is the earlier. This should be considered
when negotiating and agreeing Section 106 agreements with Local Authorities.
• Notice procedures must be followed: It is essential that the collection process is
followed and relevant forms and notices are issued, both by the developer/owner
and the Charging Authority. For developers and owners, it is essential that the
Notice of Commencement of Development is served at least one day before
development commences on site. Failure to do so will result in the loss of all
reliefs, removal of the ability to pay by instalments and penalties and interest
becoming liable. In addition there are penalties and surcharges for failing to
comply with the notice procedures set out in the Regulations.
• CIL is non-negotiable: Section 106 requirements remain subject to negotiation
whereas CIL is fixed. CIL Regulation 40 sets out the method for calculating CIL
liability. At this stage it is important to consider whether off-setting of existing
floorspace or mandatory reliefs are applicable (see Regulations 41 – 58).
21. Key Points to Remember
• Office to residential permitted
development is CIL liable
• Notice of Chargeable
Development should be served
before a CIL charging schedule
comes into force
• No statutory definition of “Gross
Internal Area”
• Existing floorspace does not
include parts of the building not
part of the planning application
site
• “Vacancy Test” – buildings in
“lawful use for a continuous
period of 6 in 36 months prior to
“date which planning permission
first permits development”
Some of the key issues / questions that we are asked.
Office to resi PD point is important to remind people of, as if the notice of chargeable development is not served before the CIL comes into force they will be liable
