CIL is a ‘tax’ applied to certain new developments and used by many local planning authorities to fund vital infrastructure although there are exemptions and reliefs allowed – but only if applied for before work starts on site.
Local authorities across the country have recently introduced new or revised charges.
They include Brighton and Hove City Council, the London Borough of Camden, East Devon District Council, Harrogate Borough Council and Runnymede Borough Council.
Alun Oliver FRICS, Managing director of E3, explains: “CIL quite rightly delivers infrastructure for local communities but it can be a minefield for some property owners and real estate businesses to navigate.
“It is not the fault of local authorities, but some homeowners, smaller developers and property professionals generally are not aware of the complexities and strict criteria involved, which mean they can miss out on the exemptions and reliefs available.”
Most new developments which create net additional floor space of 100 square metres or more, or create a new dwelling, are potentially liable for CIL.
However, some schemes for homeowners, charities or social housing may be eligible for relief or exemption from the levy – including residential annexes and extensions, and houses and flats which are built by ‘self-builders’.
Alun said: “CIL doesn’t just apply to large housebuilders and developers. It is not uncommon to hear of self-builders or homeowners building an extension or an annexe being blissfully unaware of CIL until a large bill arrives.
“By then it is too late because work has already started. Once the project commences, the owner loses the right to review or appeal the numbers, as well as the various exemptions or reliefs that may have been available. These cannot be dealt with retrospectively.
“It is clear from the published Planning Inspectorate decisions, that ignorance of the rules is no excuse.”
Alun adds: “Failure to seek advice or getting poor quality advice are perhaps the biggest concerns for projects where CIL may be an issue.
“In other parts of the country, we have seen some advisers and even local planning authorities telling homeowners various things – mostly with good intent – but contrary to the realities of the CIL Regulations and ultimately landing the owners a significant CIL liability – commonly in the range of £10,000 to £40,000, or higher.
He concludes: “Failing to follow the correct process means relief could be lost. The key to avoiding the pitfalls is to take timely and specialist advice from an expert who truly understands the rules at an early stage and get it in writing.”
