The Community Infrastructure Levy

The Community Infrastructure Levy (CIL) is a tax.

The power of local planning authorities’ (LPAs’) power to impose CIL on developers came about as a result of The Planning Act 2008. Its rationale was that the developer ought to pay towards the cost of ‘externalities’ created by the development, such as roads, schools and doctors’ surgeries. (The proportion of CIL that actually goes towards these costs is unclear.)

Developers certainly see CIL as the price of obtaining planning permission and they factor it into the cost of any development.

Each LPA decides its own rules for CIL: how it is calculated; the threshold at which it becomes due; and the types of housing which will fall outside it. So long as the CIL is calculated in accordance with the LPA’s rules, the developer has little scope to challenge it. It is best seen as a tax.

The rules governing CIL are based upon:
   (a) The type of housing
   (b) The number of units
   (c) The size of each unit
   (d) Whether the development includes ‘Affordable Housing’
   (e) The market value of each unit

Most LPAs want more houses built in their area and will modify their CIL to bring this about. Calculating the exact amount depends on the specifics. So, a 10-unit development of three-bedroom houses in Surrey will generate a CIL very different from the same proposal in Somerset. Therefore, before submitting your final application, you should ask the LPA to quote in writing what the CIL will be.

Once the CIL for a particular development has been determined, any subsequent alteration to the development will change the CIL due. Sometimes this can be significant: for example, deciding to drop from four Affordable Housing units to two can have a huge effect on the final CIL payment.