2024 community infrastructure levy lessons

Caroline Stares summarises the insights which can be gathered from CIL decisions determined last year. The community infrastructure levy is a mechanism for local authorities to secure funding for infrastructure needed to support new development, but it is complex, and the slightest mistake can be costly for developers. Permitted development Development permitted under the Town and Country Planning (General Permitted Development) (England) Order 2015 is CIL liable (appeal ref 1838604). Classification of buildings CIL is only levied against buildings, so there is often debate about what constitutes a “building” for CIL purposes. The High Court in R (London Borough of Newham) v Commissioners for His Majesty’s Revenue and Customs and others [2024] EWHC 2321 refused permission to challenge a registered valuer’s decision that the mooring of a hotel on a floating platform did not constitute a building, so no CIL was payable. The valuer correctly considered and applied the dictionary definition of a “building” and the three-part test of assessing size, permanence and physical attachment to the ground from Skerritts of Nottingham Ltd v Secretary of State for the Environment, Transport and Regions (No.2) [2000] 2 PLR 102. Other development held not to constitute buildings were glamping pods (appeal ref 1851006), shipping storage containers (appeal ref 1841766), and a substantially demolished dwelling (appeal ref 1851333). Calculation of the gross internal area CIL is calculated by reference to the gross internal area of the chargeable development. GIA is not defined in the CIL Regulations 2010, so the RICS Code of Measuring Practice is used as guidance. A registered valuer held that a covered but open parking area was internal and should be included in the GIA as it sat within the footprint of the building, underneath the upper floor accommodation (appeal ref 1844853). In contrast, in appeal ref 1851808, it was held that car ports with three or four open sides were akin to canopies and should be excluded from the GIA. In another appeal, it was held that GIA should include all mezzanine levels (appeal ref 1845942). The mezzanines formed an integral part of the permission, with the description of development, approved plans and supporting documents referring to the self-storage facility as a seven-storey building. The Code also states that mezzanine floors with permanent access (which the approved plans demonstrated was the case) should be included. In-use deductions The GIA of in-use buildings that are to be retained or demolished as part of the development can be deducted from the chargeable area. For this to apply, sufficient information must be provided to the authority, which establishes that part of a relevant building has been in lawful use continuously for six months within the three years before the day planning permission first permits the chargeable development. If part of a building is “in-use”, the deduction will apply to the whole building (appeal ref 1838604). A “building” excludes a building that is granted temporary permission but includes a permanent building which is granted permission for a temporary change of use (appeal refs 1848107, 1848129 and 1848133). Use of a building constructed in breach of conditions may not constitute lawful use (appeal ref 1846148). Regard must be had to the nature and use of the building when determining the appropriate quality and quantity of evidence required (appeal ref 1853051). The building must be in actual use to demonstrate lawful use (appeal ref 1841964). Information which can be submitted to evidence use include statutory declarations from occupiers; utility bills; payment of business rates or council tax; photographs; companies house data and accounts; and background correspondence (appeal refs 1842091 and 1845409). When calculating the GIA of retained parts for any deduction, any new-build is excluded. The CIL Regulations expressly state that for section 73 permissions, “new-build” excludes any buildings or enlargements built pursuant to the previous permission. A registered valuer has held that this rule should apply to retrospective (section 73A) permissions (appeal ref 1846148). Commencement of development triggers CIL The CIL regime is only concerned with whether development has commenced as a matter of fact. The reason for commencement is irrelevant (appeal ref APP/D2320/L/23/3330871). Development is commenced by the carrying out of a material operation, which must be linked to the approved scheme, referable to the chargeable development and more than de minimis. The Planning Inspectorate found that the creation of an access did not commence development as it could serve an existing dwelling even if a new dwelling didn’t come forward and was insignificant in the context of the whole residential scheme (appeal ref APP/A2470/L/24/3346994). In other appeals, the construction of a staircase was not sufficient to implement a permission for change of use (appeal ref APP/X3540/L/23/3331027), and the demolition of internal walls was regarded as preparatory and site clearance rather than a material operation (appeal ref APP/T5150/L/24/3345047). A commencement notice must be submitted to the authority no later than the day before development is commenced, otherwise a surcharge can be imposed, and exemptions and reliefs can be lost. The notice must be in a form published by the secretary of state (or a form substantially to the same effect), otherwise it will be ineffective (appeal ref APP/K0235/L/24/3347269). A commencement notice cannot be submitted until the authority has issued a liability notice, which must be done as soon as reasonably practicable following the grant of planning permission. In a recent appeal, 16 days was considered as soon as practicable (appeal ref APP/R3650/L/24/3347198). An authority is also not obliged to send out reminders for payment of CIL (appeal ref APP/F1610/L/24/3351607). Identical permissions are separate permissions for CIL purposes The CIL regime must be complied with separately for each permission, even where two permissions are granted for identical developments (appeal ref APP/D1590/L/24/3348740). CIL additional information Form 1 In appeal ref 1852185, the developer requested a review of the chargeable amount; the authority failed to respond so the developer successfully appealed. But as the developer failed to submit CIL Form 1 (which contains key development information) as part of the planning application, the registered valuer refused to make a cost award against the authority. Photo © Shutterstock Caroline Stares is a senior associate in the planning team at CMS