Community Infrastructure Levy - Preliminary Draft Charging Schedule

Paying the CIL

1.         What development is liable for CIL? 

Almost all new development will be liable to pay CIL. 

The following developments will be liable for CIL: 

  • Development including extensions to existing buildings that result in 100m² or more of new build floorspace.
  • Development of less than 100m²of new build floorspace that results in the creation of one or more dwellings.
  • The conversion of a building that is no longer in lawful use (please see below for the definition of lawful use). 

CIL is only chargeable on net new floorspace. Where a development includes the extension or demolition of a building in lawful use, the level of CIL payable will be calculated based on the net increase in floorspace (please see below for the definition of lawful use). This means that the existing floorspace contained in the building to be extended or demolished will be deducted from the total floorspace of the new development when calculating how much CIL is to be paid. 

The definition of lawful use is contained in Regulation 40(10) of the 2010 CIL regulations (amended 2011) which states the following: 

For the purposes of this regulation a building is in use if a part of that building has been in use for a continuous period of at least six months within the period of 12 months ending on the day planning permission first permits the chargeable development”. 

2.         Is anyone exempt from CIL? 

The CIL regulations offer mandatory exemptions and discretionary relief from CIL for certain types of development. 

These exemptions are subject to detailed government regulations and restrictions. Please refer to the national guidance available at http://www.communities.gov.uk/publications/planningandbuilding/communityinfrastructurerelief for further information. This guidance is particularly important in relation to relief for affordable housing, charitable developments and exceptional circumstances. 

Developments exempt or given relief from CIL may remain subject to Section 106 contributions, provided that those contributions are not used for the same infrastructure as CIL contributions from other developments. 

a)         Mandatory exemptions from CIL: 

  • The CIL regulations offer mandatory exemptions from CIL for the following types of development: 
  • Development of less than 100m² provided that it is does not result in the creation of a new dwelling.
  • The conversion of any building previously used as a dwelling house to two or more dwellings.
  • The conversion of, or works to, a building in lawful use that affects only the interior of the building (please see paragraph above for the definition of lawful use).
  • Those parts of a development which are to be used as affordable housing (note that this exemption is strictly defined and regulated: please refer to the government guidance detailed above).
  • Development by registered charities for the delivery of their charitable purposes (see also section (b) below on discretionary relief offered to charities).
  • Structures or buildings that people do not usually go into, or go into only intermittently for maintenance (e.g. sports pitches, sub-stations or wind turbines).

 

 b)        Discretionary relief from CIL 

The CIL regulations allow charging authorities to permit discretionary relief from CIL in two cases: (i) discretionary charitable relief; (ii) exceptional circumstances, where a developer argues that the CIL is not affordable. 

Discretionary charitable relief 

Charitable developments are subject to a mandatory relief from the CIL, where a development is for the direct delivery of their charitable purposes. The option for discretionary charitable relief relates to developments which are an investment, from which the profits are applied for charitable purposes. 

In order to maximise the certainty of funding to support infrastructure provision and to minimise administrative burdens, North Somerset Council is not intending to permit discretionary charitable relief. 

Consultation question 12: Which developments in North Somerset do you think would potentially benefit from discretionary charitable relief if offered?

Consultation question 13: Do you agree with North Somerset Council’s intention not to allow discretionary charitable relief?

Discretionary exceptional circumstances relief

Exceptional circumstances relief, whereby a developer argues that the CIL is not affordable, can only be permitted in the following circumstances: 

  • The Council has published a formal policy decision allowing developments to apply for relief.
  • A S106 agreement has been signed which incorporates a greater burden of S106 contributions than CIL contributions.
  • The development can demonstrate a lack of viability and has not already received charitable relief or social housing exemptions.
  • The site commences development within 12 months of relief being granted.
  • Compliance with State Aid regulations. In practice this equates to a maximum discount of around 200,000 Euros per individual company across a rolling three-year period.

In the event that the above scenario applies, an independent person will be appointed to determine whether the evidence permits an exemption. The Council cannot itself determine whether an exemption is valid or in any other way vary or discount the rates for specific schemes.

In order to maximise the certainty of funding to support infrastructure provision and to minimise administrative burdens, North Somerset Council is not intending to allow exceptional circumstances relief.

Consultation question 14: Which developments in North Somerset do you think would potentially benefit from exceptional circumstances relief if offered?

Consultation question 15: Do you agree with North Somerset Council’s intention not to allow exceptional circumstances relief?

3.         When is CIL paid?

 CIL payments must be paid within 60 days of the commencement of development, other than where the charging authority publishes a policy allowing for payment in instalments.

 Where outline planning permissions are permitted to be implemented in phases, charges will be triggered for each set of reserved matters applications, e.g. these are treated as if they were new separate applications. Such phases would be liable for the rates that are current at that point in time and any policy for the phasing of payments would apply separately to each reserved matters phase.

 It is expected that the majority of development is North Somerset is expected to come forward on large sites phased in the manner set out above. For this reason and to keep administrative payments to a minimum it is recommended that North Somerset does not allow additional phasing of payments.

Consultation question 16: do you agree with North Somerset’s proposal not to allow additional phasing of payments?