Relief from CIL and the importance of procedure

In R (on the application of Heronslea (Bushey 4) Ltd) v Secretary of State for Housing, Communities and Local Government [2022] EWHC 96 (Admin), the High Court has clarified two key aspects relating to the interpretation of the Community Infrastructure Levy Regulations 2010. The claimant had been granted social housing relief from CIL relating to 21 affordable homes. However, the claimant failed to submit a commencement notice as required by regulation 67(1) of the CIL Regulations and therefore, when the council identified that works had begun, it issued a revised liability notice withdrawing all social housing relief on the basis that the claimant ceased to be eligible under regulation 51(7)(a). The council also added surcharges for late payment and failure to submit a commencement notice. The claimant appealed the council’s notice, arguing that the wording of regulation 51(7)(a) precluded the relief from being lost once it had already been granted by the council. It also argued that payment of CIL was due on the date of the demand notice and not the date of commencement of development. The inspector rejected the claimant’s appeal. In upholding the inspector’s decision, the High Court referred to the approach to statutory interpretation set out in R (Fylde Coast Farms Ltd (formerly Oyston Estates Ltd)) v Fylde Borough Council [2021] UKSC 18; [2021] EGLR 29, which requires that interpretation starts with the ordinary meaning of the words but also ensures the purpose of the provision is served and the context in which it was made is taken into account. It also confirmed that official government statements and the layout of legislation may be relevant. Applying this approach, the court found the proper interpretation of “eligible” in regulation 51(7)(a) was that the development ceases to fulfil the requirements for relief from CIL. It also pointed out that the time period expressly referred to in regulation 51(7)(a) was that before the commencement of development, not that before the grant of the relief. With regard to the date on which the CIL was due, the court confirmed that this was when CIL liability arose, which was on the date of commencement of development. This was supported by regulation 31(3), which provides that where a person assumes liability for CIL they become liable to pay it on commencement of development. The date of the demand notice was not relevant in this respect, as had been previously rejected in Lambeth London Borough Council v Secretary of State for Housing, Communities and Local Government [2021] EWHC 1459 (Admin); [2021] PLSCS 99. Although the requirement in regulation 51(7)(a) has now been withdrawn in respect of liability notices issued from 1 September 2019 in England, it continues to apply in Wales, and developers should ensure it doesn’t catch them out. This case, and numerous cases before it, also demonstrates the much wider lesson that procedure is key when dealing with CIL and, if not followed, developers risk paying hefty financial penalties. Erica Snellgrove is a solicitor in the planning and environmental team at Irwin Mitchell