7. CIL FAQs
Below are some of our most frequently asked questions, which may provide an answer to your query.
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What is the difference between liable and chargeable?
A development may be liable for CIL, but not chargeable. This will occur where the development meets the conditions for CIL (liable), but a zero rate applies in the Charging Schedule and is therefore liable but not chargeable. A Liability Notice will still be issued, but will state a zero charge is due.
What counts as chargeable floorspace?
Chargeable Gross Internal Area (GIA) is the fully enclosed area of a building measured to the internal face of the perimeter walls at each floor level. For residential and non-residential buildings this includes internal walls, corridors, service areas (WCs, showers, changing rooms, plant/lift rooms), storage, stairs, lifts and garages etc. It excludes things like open balconies and open fire escapes. GIA should be measured in accordance with the “Core definitions: Gross Internal Area” set out on page 10 of the Royal Institute of Chartered Surveyors’ (RICS) “Code of measuring practice 6th edition”, which is incorporated in “RICS Property Measurement” guide published in 2015.
On a new build of 110sqm, is CIL payable on the 110sqm or the 10sqm above the threshold?
As soon as the threshold is reached, all new build floorspace is chargeable i.e. CIL would be payable on the 110sqm.
What evidence of lawful use is needed regarding an exemption from CIL?
If the existing /former use was a business, then evidence may include records from business rates, environmental health, licensing, bank statements. If it was a residential use, then evidence may include Council Tax records and utility bills. Evidence must show lawful occupancy for the time period required.
What is classed as commencement for CIL purposes?
Development is classed as commenced in accordance with Section 56 of the Town and Country Planning Act 1990 and the definition of 'material operations'. Material operations include the demolition of existing buildings, any work of construction in the course of erecting a building, digging of a trench to contain the foundations, or part of the foundations, laying of underground main or pipes, any operation in the course of laying out or construction.
My development does not need planning permission. Will I still pay CIL?
Some development commenced under general consent is liable to pay CIL. 'General consent' includes permitted development rights granted under the General Permitted Development Order 2015. If you intend to develop under general consent, and your development meets the criteria for CIL liability, you must submit a Notice of Chargeable Development to the Council before you commence. However, you do not need to submit such a notice if your development is less than 100sqm of new floorspace or it does not comprise one or more dwellings.
Do I pay CIL on a replacement dwelling?
Potentially, yes as it is a new dwelling and so incurs a CIL charge. However, you will be able to deduct the demolished floorspace from the new floorspace, providing it has been in lawful use for six months in the previous three years. You will pay CIL on any remaining floorspace. For example, if you demolish 100sqm of floorspace, and the replacement dwelling is 150sqm, you will pay CIL on the 50sqm (150sqm(new)-100sqm(old)=50sqm net gain)
I want to build a dwelling with usable loft space. Do I need to pay CIL on the loft space?
Yes. If the loft floorspace is to be usable, and entered regularly, then its conversion will be CIL liable.
Is change of use liable for CIL?
Potentially.
A planning application for the change of use of an existing building, or a change of use carried out in accordance with permitted development rights, will generally not be liable to CIL unless it involves an extension which provides 100 square metres or more of additional floorspace, or involves the creation of a new dwelling even when it is below 100 square metres.
However, if the existing building has not been occupied in a lawful use for a period of at least six months in the three years running up to the day planning permission is granted, or is deemed to have been abandoned, the development will be liable for CIL and no deductions will be made for existing floorspace.
Is CIL chargeable on mobile homes?
Not unless the caravan is static and is considered to be a permanent residential building, in which case CIL would be payable.
I received planning permission for a development but now want to vary the application / conditions. Is CIL payable?
Potentially, yes but the transitional arrangements in CIL Regulation 128A mean that CIL is only chargeable if there is a net increase in floorspace between the original permission and the Section 73 permission.
How do you calculate CIL charges on an outline application which does not contain details of the floorspace to be created/reused/demolished?
Outline planning permissions granted after CIL comes into effect will be liable to pay CIL when the development is commenced. However, liability is calculated at reserved matters stage when details are known. If an outline application includes phasing of development, each phase is treated as a separate development for the purposes of paying CIL. CIL liability for each phase is calculated at the reserved matters stage for that phase.
What happens if I don't pay?
CIL payment is mandatory and non-negotiable. If CIL is not paid on time, we have there are strong enforcement powers relating to recovery of the debt, which are set out by central government and can include any of the following actions in accordance with the CIL Regulations:
- Withdrawal of any agreements for instalments or relief/exemptions.
- Surcharges/penalty payments and late payment interest.
- Issuing of a CIL Stop Notice.
- Application to the courts for a Liability Order.
Failure to pay CIL can also lead to a prison sentence.
What happens if I have claimed liability but then sold the site?
Liability can be transferred to another person before development commences. If you want to transfer or withdraw liability you will need to complete the relevant forms and submit them to the Council.
Is VAT applied to CIL?
No. CIL is outside the scope of VAT.
Does CIL respond to inflation?
Yes. An index of inflation (All in Tender Price Index) is used in the calculations for chargeable amount. At the start of each calendar year, the schedule of CIL rates is updated to add inflation.
I’ve overpaid. What should I do?
Councils should pay back overpayments, unless the overpayment is so small that it would cost more in administration costs, the payment has been credited through abatement, or is the result of a land or infrastructure payment.
Does CIL replace planning obligations (Section 106 agreements)?
No, S106 agreements will be primarily used to deal with affordable housing and with site-specific measures which are required to mitigate the impact of development. They may also be used in circumstances where a development proposal results in the loss of an existing facility or site feature, and we require the replacement of that facility/feature either directly by the developer or through a financial contribution set out in a S106.
What happens to the CIL I pay?
80% of the CIL is used to fund new or improved large-scale infrastructure, community facilities and wildlife improvements.
15-25% is set aside as a neighbourhood portion, and is spent by the City Council on local projects in consultation with local communities.
5% will be used for administration costs.
The details relating to annual CIL receipts and expenditure can be found in the CIL Annual Infrastructure Funding Statement.
What about the self-build exemption on multi-unit sites?
Where the development proposals are for a multi-unit scheme, for example where a builder sells serviced plots or a community group works with a developer, applicants can consider applying for a phased planning permission. This would allow each plot to be treated as a separate chargeable development. This would prevent the problem of payment of the charge being triggered on all plots when work beginning on the first dwelling. This ensures that if a disqualifying event happens on one plot, it would not trigger a requirement for all plots to pay back the exemption. Detailed, hybrid and outline permissions can be treated as phased developments for the purposes of the levy. It is important that applicants make it clear when submitting their planning application that they want a phased planning permission for a multi unit scheme