Teal blue header image

Covid-19 - Measures to help developers with CIL payments

The Ministry of Housing, Communities & Local Government (MHCLG) yesterday (13 May 2020) published some guidance in response to the Covid-19 outbreak for local authorities, setting out how they may assist in easing the burden on developers to pay, where applicable, Community Infrastructure Levy (CIL).

MHCLG has set out its intention to amend the Community Infrastructure Levy Regulations 2010 (as amended) (the Regulations) to enable charging authorities to:

  • defer payments of CIL;
  • temporarily disapply late payment interest which would otherwise accrue automatically; and
  • provide a discretion for charging authorities to return interest already charged where they consider it appropriate to do so for developers that have an annual turnover of less than £45 million.

These proposed amendments to the Regulations have not yet come into force, and are only intended to take effect temporarily until the economy has recovered. In the meantime, charging authorities are being encouraged by MHCLG to:

  • Make use of their pre-existing ability to introduce or amend instalment policies for the payment of CIL.
  • Use their discretion when considering whether enforcement action for unpaid CIL is appropriate in the circumstances. Ordinarily, a collecting authority may issue a CIL stop notice to prevent development until the CIL liability has been paid. Collecting authorities may wish to use the flexibility in the Regulations and refrain from taking enforcement action. 
  • Take a positive approach to their engagement with SME developers, ensuring that CIL liabilities do not cause an undue burden over the period of disruption caused by Covid-19.
  • Make use of the flexibility in the Regulations. Collecting authorities can exercise their discretion and do not have to impose a surcharge in the event of late payment of CIL (albeit that late payment of interest will remain mandatory until such time as the amended Regulations are able to take effect).

Section 106

The guidance from MHCLG also encourages local authorities to take a ‘pragmatic and proportionate’ approach to the enforcement of section 106 planning oblations at this time in order to prevent sites from stalling.

The proposed amendment to the Regulations and guidance for collecting authorities and local authorities is intended by MHCLG to form part of a wider package of financial measures introduced as a result of the Covid-19 outbreak in order to support businesses and, in this case, specifically small and medium-size developers.

TLT has extensive experience in advising on CIL. If you would like to discuss any issues, please get in touch.

Contributor: Kate James

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at March 2020. Specific advice should be sought for specific cases. For more information see our terms & conditions.

Insights & events View all