Community Infrastructure Levy (CIL)
Section 4 Implementing CIL
How CIL will be collected
4.1 The Council will issue a notice of liability as soon as practicable on or after the day on which a planning permission first permits development stating the chargeable amount in relation to the development. The responsibility to pay the levy runs with the ownership of land on which the liable development will be situated and is a local land charge. Payment of the levy is due from the date the chargeable development commences. A commencement notice must be submitted to the Council no later than the day before the day on which the chargeable development is to be commenced. It is the intention of the Council to prepare and make available the appropriate documentation and templates on its website prior to implementing the CIL.
4.2 Unlike contributions received via s.106, CIL funds will go into a central 'pot' on receipt and will be pooled to be spent on the projects identified in the Regulation 123 Infrastructure List.
Payment by instalments
4.3 Regulation 69B of the amended CIL Regulations permits a charging authority to allow persons liable to pay CIL to do so by instalments following the publication of an instalment policy. Where there is no instalment policy in place or where an instalment policy is not applicable, the amount must be paid in full at the end of the period of 60 days beginning at commencement of development.
4.4 The draft Instalment Policy included in Appendix 2 sets out the Council's proposals for such a policy, which would be put in place once the charging schedule has been adopted. Whilst the draft Instalment Policy will not itself be subject to Public Examination, the draft policy has been included as part of this consultation to enable interested parties to consider its implication on development finance and delivery.
Payment in kind
4.5 The Regulations provide the potential for a charging authority to accept payments in kind for CIL, in the form of a transfer of land to be used for infrastructure provision (as set out in Regulations 73 and 74). The value of the land needs to be equal to the amount of the CIL that would have been paid - with the land value being assessed by an independent valuer. It is in lieu of CIL, and is in addition to any transfer of land which may be required via planning obligations as site specific impact mitigation. It is the Council's prerogative to agree to a transfer.
Exemptions from CIL: Mandatory exemptions
4.6 The CIL regulations offer mandatory exemptions from CIL for certain types of development:
- Where the overall chargeable amount of a scheme is less than £50 (Regulation 40)
- Development of less than 100sqm provided that it does not result in the creation of a new dwelling (Regulation 42) - Minor Development Exemption
- The conversion of any building previously used as a dwelling house to two or more dwellings
- The conversion of, or works to, a building in lawful use that affects only the interior of the building
- Those parts of a development that are to be used as affordable housing (Regulation 49) - Social Housing Relief
- Development by registered charities for the delivery of their charitable purposes (Regulation 43) - Charitable Relief
- Structures or buildings that people do not normally go into, or go into only intermittently for maintenance (e.g. sports pitches, sub-stations or wind turbines) (Regulation 6)
- Self-build (whole house, annexes and extensions)
4.7 A claim for relief/exemption from paying CIL must be submitted and processed before commencement of the development (standard forms will be made available for completion).
Exemptions from CIL: Discretionary relief (charitable, social housing and exceptional circumstances)
4.8 The regulations allow charging authorities to permit discretionary relief from CIL (e.g. where a reduced or nil payment may be accepted). These cases are likely to be rare but could include the following:
- Development by charities for investment activities (as defined by Regulation 44)
- Development by charities where relief would normally constitute State Aid (as defined in Regulation 45)
- Provision of affordable housing by someone other than the local authority or a Registered Provider (as defined in Regulation 49A)
- Where the Council considers there are exceptional circumstances to justify relief (as defined in Regulation 55).
4.9 It is not the intention of the Council to offer discretionary charitable or social housing relief at present. At this stage the need for discretionary relief in addition to the mandatory relief is not considered justifiable and moreover, discretionary relief will only add uncertainty for developers in relation to infrastructure contributions, which is a situation not dissimilar to the current system of planning obligations where lengthy planning application negotiations, particularly on viability grounds, are time consuming and costly to both developer and the Council. A policy of this kind could be introduced at any stage though if considered necessary (subject to appropriate public consultation) and this position will be kept under review.
4.10 Regulation 55 of the CIL Regulations permits a charging authority to grant relief from liability to pay CIL in 'exceptional circumstances'. This may only happen if a planning obligation has been entered into in respect of the planning permission that permits the chargeable development and the charging authority considers that payment of the levy would have an unacceptable impact on the economic viability of development. In such cases a developer would be expected to demonstrate this (as set out in Regulation 57) via an 'open book' approach with an agreed independent valuer (paid for by the developer). Relief can also only be granted if it does not constitute 'notifiable state aid' (as defined in European Law).
4.11 It is not the intention of the Council to offer discretionary exceptional circumstances relief at present. The circumstances in which a policy of this nature would be likely to be used would be extremely rare given that the CIL rate that will be set is based on viability evidence, and as stated above, will add undesirable uncertainty for developers. A policy of this kind could be introduced at any stage though if considered necessary (subject to appropriate public consultation) and this position will be kept under review.
4.12 Almost all parties liable to pay the levy are likely to pay their liabilities without problem or delay, guided by the information sent by the charging authority in the liability notice. However, where there are problems in collecting the levy, charging authorities are able to penalise late payment and discourage future non-compliance. The regulations provide for a range of proportionate enforcement measures ranging from surcharges on late payments to up to three months imprisonment in extreme cases.
Do you consider that the draft Instalment Policy is reasonable? If not, why not?
Do you agree that the Council's interpretation of the legislation regarding exemptions and relief is correct?
Do you consider that the Council should offer discretionary charitable relief (in addition to mandatory relief)? If yes, in what circumstances would discretionary charitable relief be justified?
Do you consider that the Council should offer discretionary social housing relief (in addition to mandatory relief)? If yes, in what circumstances would discretionary social housing relief be justified?
Do you consider that the Council should offer discretionary relief in exceptional circumstances? If yes, what exceptional circumstances do you think would justify relief?
Do you have any other comments on the PDCS or evidence base documents? Please provide reasoning with your answers.