Community Infrastructure Levy (CIL)

What is CIL?

The Community Infrastructure Levy (CIL) was originally introduced in the 2008 Planning Act; Part II and took effect from 6^th April 2010.  Local Planning Authorities (LPAs) in England and Wales have a choice whether or not to charge CIL on new developments in their area.  The levy was originally designed take over from the previous system of agreeing planning obligations between developers and local councils under “section 106” agreement under the Town and Country Planning Act 1990.  In areas where CIL has been adopted, individual homeowners and/or developers must pay the levy charge to the local council, which is calculated based upon the size and type of new development as required by the council’s CIL charging schedule.

The money raised from the Community Infrastructure Levy is aimed to support development by funding infrastructure that the council and local community need, such as safer road schemes, park improvements, and health centres etc.

As of May 2020, 174 (51%) LPAs in England and 3 (14%) LPAs in Wales have so far implemented CIL with a further 86 (24%) having either submitted for examination or in the process of draft consultations to introduce CIL.  Most LPAs apply CIL to a variety of development types (residential, retail, hotels, student accommodation, offices, etc.) and have varying rates across their location – sometimes creating dedicated zones where the CIL rate may be lower or higher in these different locations.

Some LPAs have decided not to implement due to concerns about CIL deterring investment and new development in the area. However in the 2019 consultation and subsequent CIL Amendment Regulations 2019 it was agreed that CIL and s.106 should continue to operate together to enable LPAs to optimise the developer contributions required from a particular planning approval.  The prior CIL 123 Restrictions, effective since 1 April 2015, were also withdraw permitting LPAs greater flexibility in raising contributions.  However developers should be mindful that s.106 is a negotiated position between the parties, yet CIL is rather rigid and inflexible based on:

CIL Rate x Floor Area x TPI Index uplift

Hence it is essential that developers ‘know their numbers’ and ensure the expected CIL amounts are factored into the overall project viability and reflected in any s.106 agreement too.

How We Can Help

E3 Consulting has been advising on CIL since 2014 and are one of the leading specialists helping ‘tax payers’ understand the implications of CIL on their projects.  We can and do advise property developers, architects, planning consultants and/or individual home owners to establish, manage and if possible mitigate the CIL liabilities on their projects.  More importantly – we help to ensure they know in advance - the necessary procedures that must be followed to ensure their projects comply with CIL Regulations.  

We have advised on numerous different projects throughout England & Wales including most London Boroughs - that also have the ‘double whammy’ of Mayoral CIL (MCIL) in addition to Borough CIL (BCIL).  Helping clients with self build exemption applications (house, extension & annex) as well as Social Housing relief, to reduce CIL to nil.  We also help undertake reviews of CIL liabilities as well as raising formal challenges and appeals on particular technical aspects, or to correct errors made by the LPAs… we are all human!

The CIL Regulations are poorly drafted and have been subject to significant amendment, almost yearly, creating even more complexity as no definitive consolidating text exists.  There are rigorous processes in place to ensure the LPA captures the appropriate CIL from the land owner/developer and many ‘trip-wires’ that usually result in expensive CIL liabilities, various different surcharges and interest charges for the unwary.  The most extreme cases could involve a criminal conviction and up to a two year prison term.

If you are a professional adviser, why risk your Professional Indemnity Insurance (PII) or even your firm’s hard won reputation by straying into this complex and costly area?  We can manage the risk to you, your firm and your client to ensure the optimum CIL position is achieved.  We have seen a worryingly high number of incidents of consultants giving negligent and incomplete advice – resulting in very substantial CIL liabilities, formal complaints, PII claims and increasing levels of litigation.

If you are a home owner, we regularly see reluctance to take for professional advice – at the right time.  But CIL is truly one of those aspects of property and construction where it pays to seek out the best advice and as early on as possible… a stitch in time etc.!  Given the complexity of the legislation it can be all too easy for the non-specialist to miss what appears a minor matter, but turns out to be an important and essential step in the procedural route map.  Too many procrastinate or delay - ignoring correspondence or notices from the LPA - hoping the matter might simply go away.  In our experience whilst some LPAs can be slow to follow up and pursue any CIL liability, most do not entirely overlook it for good – and like any financial matter - they have a tendency to strike at the most inopportune time.  Forewarned is forearmed, and we have helped many clients achieve their project goals whilst managing and optimising their CIL liabilities. 

E3 Consulting’s award winning team of property taxation specialists can help to save you money, time and anxiety.  With our expert support – we ensure our clients avoid costly mistakes – yet fully understand how CIL impacts them and their projects.  Assisting with the quantification of CIL liabilities, explanation of the CIL regulations, submission of the relevant CIL forms and where appropriate assessment and, if appropriate, implementation of any CIL reduction strategies.

Our fees can be contingent upon the outcome, thus we only get paid for results achieved.  Other projects operate on time based fees incurred in resolving and clarifying your matter or with sufficient awareness of the particular project issues we can provide a fixed ‘lump sum’ fee.  Which fee route will depend upon the specific project requirements, circumstances and starting point.

Above all CIL is time sensitive – so don’t delay, contact E3 Consulting and let us help you achieve your project goals.