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 [2021] acts as a useful reminder of the steps that need to be taken.

When should a CIL liability notice be served?

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.

How do you claim an exemption for self-build housing?

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:

  • assume liability to pay CIL;
  • submit a claim for the exemption;
  • not commence the development before the claim has been received and determined by the collecting authority; and
  • submit a Commencement Notice no later than the day before the day on which the development is to be commenced.

The same steps apply in relation to other exemptions, with the exception of the exemption for minor development, which is automatic.

What happened in the Hertsmere case?

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 the formal notification of a person’s liability to CIL.
  • It identifies any other recipients of the notice, their addresses, and the category within which they fall.
  • It sets out the amount of CIL payable, showing how the calculation has been made.
  • It indicates whether the authority accepts that the person is eligible for any exemption or relief from CIL.
  • It notifies the owner of the land that “[t]his CIL liability has been registered as a local land charge against the land affected by the planning permission in the notice”.
  • It explains the requirement to submit a commencement notice disclosing the date when development will commence. It warns the recipient that failure to submit a commencement notice may result in the loss of relief claimed.
  • It explains that the Council will send a demand notice after a commencement notice has been served, setting out the final amount payable, the date when payment must be made, and the precise payment arrangements.
  • It explains that liability to pay in full arises from the date development commences.
  • It explains the consequences of non-payment, including liability to additional surcharges.
  • It offers recipients a right to apply for a review of the calculation by the authority.
  • It sets out the rights of appeal to the Valuation Office Agency (an executive agency of Her Majesty’s Revenue and Customs).
  • It directs the recipient to the appropriate links and addresses for obtaining further information and copies of CIL forms.’

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

Written by

Katherine Evans

Katherine Evans

Date published

04 May 2021


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