Understanding the Community Infrastructure Levy: Funding Future Growth and Development

In an era of rapid urbanisation and development, the importance of funding local infrastructure projects cannot be overstated. From schools and hospitals to roads and parks, our communities rely on high-quality facilities to support their growth and well-being.  

This is where the Community Infrastructure Levy (CIL) comes in. The CIL is a planning charge designed to help local authorities fund essential infrastructure projects while ensuring that new developments contribute their fair share to the cost. 

In this guide, we’ll delve into the world of the Community Infrastructure Levy, exploring its purpose, how it’s charged, the roles and responsibilities of various stakeholders, and the impact it has on planning and development.  

So, whether you’re a developer, landowner, or just a concerned citizen, read on to discover how the CIL plays a crucial role in shaping the future of our communities. 

Jump to: 

• What is the Community Infrastructure Levy? 
• Roles and Responsibilities in the Levy Process 
• Calculating Costs and Paying 
• Community Infrastructure Levy and Your Project 
• Payment Process and Enforcement 
• Impact on Planning and Development 
• Professional guidance on community infrastructure levy 
• Can you remove CIL from your development? 

What is the Community Infrastructure Levy?

The Community Infrastructure Levy, (updated by the Community Infrastructure Levy Amendment in 2019) is a charge that local authorities can impose on new developments to generate funds for the infrastructure, facilities, and services needed to accommodate new homes and businesses. The ultimate liability lies with landowners, but developers can also assume liability for the Community Infrastructure Levy. 

The local planning authority is responsible for ensuring that the levy is used in an efficient and effective manner to deliver infrastructure projects funded by the CIL. 

Why was the community infrastructure levy introduced?

The primary goal of the Community Infrastructure Levy is to facilitate local infrastructure projects and ensure that new developments bear the cost of necessary infrastructure. By doing so, the levy supports development by funding essential infrastructure such as: 

• roads 
• public transport 
• schools
• healthcare facilities
• green spaces 

These infrastructure projects are essential for the development of local communities, and the levy helps to ensure the development of local communities. 

Roles and Responsibilities in the Levy Process

There are various stakeholders involved in the Community Infrastructure Levy process, each with their own roles and responsibilities. These include: 

• Charging authorities (typically local planning authorities) 
• Collecting authorities 
• Developers
• Landowners 

Effective collaboration and communication among these stakeholders are essential for the smooth functioning of the CIL process and the successful delivery of infrastructure projects funded by the levy.

Charging authorities

Charging authorities, such as local planning authorities, are responsible for: 

• Setting and implementing levy rates
• Determining and administering levy rates based on the needs of the local community 
• Considering the viability of development 
• Consulting with stakeholders 

The charging authorities must ensure that the levy rates are fair, reasonable, and reflective of the costs associated with providing the necessary infrastructure in their area. 

Collecting authorities

Collecting authorities, usually the same as charging authorities, are responsible for: 

• Calculating and collecting the levy payments 
• Accurately computing and gathering individual levy payments 
• Ensuring that the charges are collected in a timely and efficient manner. 

Collecting authorities also play a key role in enforcing the CIL regulations and ensuring compliance with the levy process. 

Developers and landowners

Developers and landowners are responsible for paying the Community Infrastructure Levy, either by assumed liability themselves or by transferring liability to other parties involved in the development. It is crucial for developers and landowners to understand their obligations under the CIL regulations and to communicate effectively with charging and collecting authorities to ensure timely payment of the levy and compliance with the process.

Calculating Costs and Paying

How is the CIL rate determined?

The Community Infrastructure Levy is calculated by local authorities using the size and type of development as parameters, with rates set in approved charging schedules. 

Setting and updating levy rates is a crucial aspect of the Community Infrastructure Levy process. Charging schedules, which determine the rates for the CIL, must be based on infrastructure needs, development viability, and feedback from stakeholders. Regularly reviewing and revising the charging schedules is essential to ensure that the levy rates remain fair, reasonable, and reflective of the costs associated with providing the necessary infrastructure in each area. 

In this section, we’ll discuss the process of creating and updating charging schedules and the importance of balancing infrastructure funding with development viability when setting levy rates. 

When and how to pay the Community Infrastructure Levy?

Charging schedules are created by local authorities to set levy rates based on infrastructure needs, development viability, and consultation with stakeholders. When formulating a charging schedule, the charging authority should consider the cost of infrastructure, both current and projected, the feasibility of development, other potential sources of funding for infrastructure, and the associated administrative expenses. 

A well-designed charging schedule ensures that the levy rates are fair and reasonable, while providing the necessary funds for local infrastructure projects. 

Reviewing and revising rates

It is important for charging authorities to periodically review and revise levy rates to reflect changes in market conditions, infrastructure needs, and the impact on future development. This process may involve reviewing and adjusting the charging schedule, consulting with stakeholders, and evaluating the infrastructure requirements of the area. In some cases, issuing a demand notice may be necessary to ensure compliance with the updated charging schedule. 

By regularly updating the levy rates, charging authorities can ensure that the CIL remains an effective tool for funding local infrastructure projects while maintaining the viability of development in their area. 

Community Infrastructure Levy and Your Project

What types of developments are subject to the Community Infrastructure Levy?

Not all developments are subject to the Community Infrastructure Levy. In general, developments over 100 sqm or those creating new dwellings are liable for the levy, but certain exemptions and reliefs may apply.  

This means that larger residential and commercial developments, as well as those creating new dwellings, are typically liable for the CIL. 

Understanding which developments are eligible for the CIL and which ones may qualify for exemptions is crucial for developers and landowners to accurately estimate their financial obligations in relation to a particular project. 

However, there are some exemptions and reliefs that may apply. 

What are the exemptions from CIL?

Certain types of developments may qualify for exemptions or reliefs from the Community Infrastructure Levy. These can include: 

• Minor developments with a gross internal area of less than 100 square metres (provided they do not result in a new dwelling) 
• Residential annexes and extensions 
• Charitable exemptions 
• Social housing relief 
• Self-build exemption 
• Exceptional circumstances relief 

Claiming an exemption or relief from the CIL requires meeting certain criteria and following specific procedures. For example, individuals who extend their own homes or construct residential annexes within the grounds of their own homes are exempt from the levy, provided they comply with regulations 42A and 42B. However, letting the residential annex or selling it separately from the main dwelling within a 3-year claw-back period will result in the exemption being revoked. 

Understanding the available exemptions and reliefs, as well as the eligibility criteria and procedures, can help developers and landowners avoid unnecessary CIL charges and ensure compliance with the regulations. 

Payment Process and Enforcement

The payment process for the Community Infrastructure Levy involves various stages, including claiming relief or exemption, assuming liability, submitting a liability notice, and submitting a commencement notice. Ensuring timely payment of the levy is crucial for the efficient functioning of the CIL system and the successful delivery of infrastructure projects funded by the levy. 

In this section, we’ll explore the payment process for the CIL, as well as the enforcement measures in place to ensure compliance and timely payment of the levy. 

Payment stages

The payment process for the Community Infrastructure Levy (CIL) typically involves the following steps: 

1. The developer or landowner claims any applicable relief or exemption. 
2. The developer or landowner assumes liability for the levy. 
3. The developer or landowner submits a commencement notice to the collecting authority. 
4. Once the development commences, the levy charges become due. 
5. The levy charges must be paid within a specified time, which can vary depending on the local authority’s instalments policy. 

It is important for developers and landowners to understand the payment stages and timelines to ensure timely payment of the levy and compliance with the CIL regulations.

Enforcement measures

Collecting authorities have several enforcement measures at their disposal to ensure timely payment of the Community Infrastructure Levy and compliance with the levy process. These measures include: 

• Surcharges on late payments 
• Community Infrastructure Levy stop notices
• Liability orders 
• Charging orders 
• In rare cases, imprisonment for up to 3 months. 

By enforcing the CIL regulations and taking appropriate measures to address non-compliance, collecting authorities can ensure the efficient collection of levy payments and the successful delivery of infrastructure projects funded by the CIL.

Impact on Planning and Development

The Community Infrastructure Levy has a significant impact on planning and development, as it is closely linked to planning permission and can influence planning conditions and amendments. Furthermore, striking the right balance between infrastructure funding and development viability is critical when setting levy rates to ensure that the CIL does not hinder the delivery of sustainable development.

The role of local planning authorities in CIL

The CIL is closely connected to planning permission, as it’s usually specified as a condition within the Decision Notice of the planning application, and it’s payable when planning permission is granted for specific types of development. While the levy is designed to support development by funding necessary infrastructure, there may still be a need for development-specific planning obligations to ensure that the local planning authority is assured that the specific impacts of a particular development can be addressed. 

This means that the CIL, planning permission, and planning act are not mutually exclusive, and developers and landowners must take all three into account when planning and executing their projects. 

Charging authorities must ensure that the levy rates are fair and reasonable, while providing the necessary funds for local infrastructure projects through infrastructure funding statements. 

By carefully considering infrastructure requirements, development feasibility, and other sources of funding, charging authorities can set levy rates that support the growth and well-being of their communities without hindering the delivery of sustainable development.

Community Infrastructure Levy summed up

The Community Infrastructure Levy is a vital tool for local authorities to fund essential infrastructure projects and ensure that new developments contribute their fair share to the cost.  

In June 2023, in response to criticism from London Mayor Sadiq Khan, a Department for Levelling Up, Housing and Communities (DLUHC) spokesperson said: “The new Infrastructure Levy will ensure we are delivering affordable housing alongside vital infrastructure.” 

As our communities continue to grow and evolve, the Community Infrastructure Levy will play an increasingly crucial role in shaping their future. By understanding and effectively navigating the CIL process, developers, landowners, and local authorities can work together to deliver the high-quality infrastructure our communities need to thrive. 

Can you remove CIL from your development?

WindsorPatania have successfully helped a client have the CIL tax removed from their project.  

We were transforming an historic theatre that had been abandoned for decades into 24 modern apartments. Because this building had become a local eyesore, and the council were firmly interested in turning it into something positive for the town, we were able to highlight the benefits that the new development would bring. Within a detailed report we were able to demonstrate that the additional £250,0000 CIL tax would have also made this project unviable, so the council agreed to waive it. 

So yes, it is possible, but there must be exceptional circumstances. 

Professional guidance on community infrastructure levy

Navigating the intricacies of the Community Infrastructure Levy (CIL) requires a deep understanding of regulations, calculations, and potential impacts. Seeking professional advice can make a significant difference in ensuring compliance, optimising costs, and achieving successful project outcomes.

How Can You Benefit from Professional Advice on CIL?

• Expertise: CIL regulations are complex and subject to updates. Professionals stay abreast of changes and possess in-depth knowledge to guide you through the process.
• Accurate Assessments: Professionals can accurately calculate CIL liabilities, exemptions, and reliefs, minimising the risk of overpayment or non-compliance.
• Strategic Planning: With a clear understanding of CIL implications, professionals help you strategically plan your project, considering CIL costs in budgeting and feasibility analyses.

How WindsorPatania can help with CIL

Our team at WindsorPatania offers specialised expertise to assist you in your CIL journey:  

• Comprehensive Assessment: We assess your project’s specifics and provide a tailored analysis of potential CIL costs, exemptions, and reliefs.
• Strategic Guidance: Our experts help you devise strategies to minimise CIL impact, optimising financial planning and project feasibility.
• Regulatory Compliance: We ensure you adhere to CIL regulations, avoiding penalties and setbacks, and can help you navigate the appeals process if necessary. 

By partnering with our team at WindsorPatania you’ll gain a trusted ally committed to ensuring your CIL journey is smooth, compliant, and financially optimised. Take a look at our previous projects to see how we’ve helped people before. 

Explore our wide range of services, or submit your project today, and let us be your guide as you navigate the complex landscape of the Community Infrastructure Levy.