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The Community Infrastructure Levy (CIL) has been with us for more than 10 years. During that time, the regulations have been amended numerous times. In August last year, the government announced wide-ranging planning reforms, which included the replacement of CIL, and section 106 agreements, with an Infrastructure Levy. However, for the moment, CIL provides an important income stream for local authorities. In a recent case, a series of events meant that a council was prevented from charging CIL. The case of R (on the application of Trent) v Hertsmere Borough Council  acts as a useful reminder of the steps that need to be taken.
In areas where CIL is in force, applicants for planning permission should include a completed Additional CIL Information form with their planning application. This enables the authority to calculate the amount of CIL payable. Under regulation 65(1) of the Community Infrastructure Levy Regulation 2010 (the Regulations), the collecting authority must issue a Liability Notice as soon as practicable after the day on which a planning permission first permits development.
The Hertsmere case concerned self-build housing, which can benefit from an exemption from CIL liability. In order to claim the exemption, the person who intends to build, or commission the building of, a new dwelling for occupation as their sole or main residence, must do the following:
The same steps apply in relation to other exemptions, with the exception of the exemption for minor development, which is automatic.
The claimant submitted an Additional Information form, but did not submit an Assumption of Liability form, because the council had advised her that it was not mandatory. She was unaware that the Assumption of Liability form was required in order to claim an exemption from CIL for self-build housing.
Planning permission was granted on 10 February 2017. Although they prepared a draft Liability Notice in February 2017, the council did not send it to the claimant.
Following completion of the works, the council issued a Liability Notice in 2019, almost two and a half years’ after the grant of planning permission.
Following an appeal by the claimant, a planning inspector decided that the Liability Notice was invalid as it was not served as soon as practicable after the day on which a planning permission first permits development, as required by regulation 65(1). The council then issued a new Demand Notice in 2020, and the claimant challenged this by way of judicial review.
Mrs Justice Lang was critical of the conduct of the council in the case, setting out that the ‘draft 2017 liability notice was not even completed by the Council, let alone issued and served. This was a significant failure on the part of the Council.’ Although a collecting authority may subsequently issue a ‘revised liability notice’, this only enables it to amend or replace an earlier valid liability notice.
Other criticisms of the council related to their record-keeping, and poor administration (for example, the 2019 Liability Notice was addressed to a business, rather than the claimant individually).
As Mrs Justice Lang stated, ‘the liability notice is critically important for the following reasons:
It is vital for collecting authorities to have procedures in place to ensure that they are sending out Liability Notices in a timely manner, to the correct recipient(s).
Those claiming an exemption must also follow the prescribed steps, or risk losing the benefit of that exemption. The court had sympathy, in this case, with the claimant – an individual without experience of CIL. Had the council sent out the Liability Notice correctly, and the claimant still not submitted the Assumption of Liability form, and Commencement Notice, she could have lost the benefit of the exemption and found herself with a large CIL charge.
TLT has a wealth of experience in advising on CIL and other planning matters. If you would like to discuss your matter, please get in touch.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at May 2021. Specific advice should be sought for specific cases. For more information see our terms & conditions.
Contributor: Alexandra Holsgrove Jones
04 May 2021