Community Infrastructure Levy – some recent decisions from PINS
We highlight below some recent decisions of the Planning Inspectorate (PINS) in relation to the Community Infrastructure Levy (CIL), and how to best avoid the imposition of surcharges.
CIL – a refresher
Who is liable to pay CIL?
The person liable to pay CIL is the person who "assumes liability". Liability is assumed by submitting an "assumption of liability notice" to the collecting authority. Liability can be assumed by a number of parties who will each be held jointly and severally liable.
Assumed liability can be withdrawn at any time before development commences, and transferred to another person after commencement of development but before the sixty-day payment window has expired.
What happens when no-one assumes liability?
Where no-one assumes liability, liability for CIL will be apportioned between those persons having a material interest in the land at the commencement of the development. A material interest is either a freehold estate or a leasehold estate for a term which expires more than seven years after the day on which planning permission is granted.
The effect of the CIL Regulations 2010 is that liability in default for CIL will run with the ownership of the land. Where land changes hands, the liability will rest with the new landowner.
If no assumption of liability notice is served then a surcharge can be demanded and the CIL liability cannot be paid by instalments.
Once liability has been assumed, the collecting authority will issue a "liability notice" to all relevant parties as well as the landowner, if the two are different.
The CIL Regulations 2010 require the submission of a "commencement notice" by the liable party. It is vital that this is submitted before development commences, or a surcharge will be issued.
Creditors liable for CIL surcharges
PINS have recently dismissed an appeal against the imposition of surcharges for failure to assume liability and serve a commencement notice. The appellant accepted that a liability notice was served by the charging authority, but contended that it was unaware of it, so that it could not assume liability and serve a commencement notice.
In this case, the liability notice was served on the person who applied for planning permission, but the property subsequently fell into receivership. The appellants were appointed receivers by the creditors but were not informed of the liability notice.
While the appointed person expressed sympathy with the situation of the creditors, he found that the charging authority correctly served the liability notice so that the appeal had to be dismissed and the surcharges upheld.
Check collecting authority has received commencement notice before starting development
In another recent decision of PINS, the appellant posted a commencement notice on 18 April 2019 stating an intended commencement date of 3 May 2019. However, the collecting authority did not receive the notice and the appellant could not provide any proof of postage.
While the inspector had sympathy with the appellant, if the commencement notice was genuinely posted in good faith, the inspector took the view that the decision to commence development without having received an acknowledgement of receipt was a risky strategy to take.
The inspector could not be satisfied that a commencement notice was submitted before works began on the chargeable development and therefore could only conclude that the alleged breach occurred.
The appeal was dismissed and the surcharges upheld.
If you have any questions regarding CIL liability, then please contact the Planning team.