Five tips to cut your CIL liability

30th September 2021

The Community Infrastructure Levy (CIL) can be tricky – and expensive.

Peter Higginbottom, Managing Director of Planning Insight, shares his strategies for avoiding common CIL missteps and making the process as risk-free as possible. 

But, before we delve into these tips, let’s take a look at what CIL actually is: 

 

“CIL is a charge on new developments and it’s set out by councils to be able to fund infrastructure – and that covers various things, such as transport, schools, hospitals, local space provision.” – Peter Higginbottom

 

Five tips to cut your CIL liability

CIL payments are one of the standard costs of a new development, but there are things you can do to manage your liability.

 

  • 1. Be proactive

As CIL is separate from the local plan, it can fly under the radar – especially for SME developers, who often have a much lower liability than the larger housebuilders. 

However, it’s worth being proactive with CIL as you’ll give yourself more time to research and budget for the levy charge. 

You should start calculating CIL costs as early as possible as it can give you a better understanding of your market position and projected profit – particularly useful when negotiating land deals. 

Further along in the process when you get your CIL liability notice, it’s worth checking it there and then. Spotting any submission errors or miscalculations early on will make it easier to get your liability notice amended promptly.

 

  • 2. Choose your location wisely

CIL charges can vary wildly, particularly in London. Central locations with higher house prices tend to be the boroughs where there’s a larger CIL liability. 

Local authorities can set a consistent CIL charge for the whole borough (which tends to be on the cheaper end of the scale), but there’s also the potential for one borough to have multiple charging zones.

The cost of the levy is also dependent on the needs of a particular local authority – as some may require more expensive community infrastructure than others. 

It’s also worth noting that some local authorities don’t charge CIL. There’s the potential to save costs by developing in a neighbouring area where you wouldn’t have to pay any CIL liability.

These big differences across relatively small areas mean that planning and research are key – as you don’t want to get stung by a higher liability than originally budgeted for.

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  • 3. Know the CIL exemptions

There are exemptions and exceptions to CIL, which could save you a lot of money if your project fits their criteria.

For example, any new development or floor space is chargeable under CIL, but the first 100 sqm is not unless you’re creating a new dwelling. Slightly complicated, but basically a build which is not a dwelling (ie. a commercial project) would not be chargeable under CIL if they were just adding an extension that was under 100 sqm. 

If you’re claiming an exemption, it’s integral that you do it before you commence development or it won’t count. Try and get your exemption claims in early so you don’t slow down the process or risk missing out. 

Local authorities may also have their own specific exceptions, like charging a zero rate for commercial developments if they want to encourage more economic activity. 

 

“When a council adopts its CIL levy charge, it sets out different types of development...so you’ve got different types and different zones. Some councils will zero rate or nil rate particular types of development if they want to encourage it.” – Peter Higginbottom

 

  • 4. Check for instalment policies

Some councils may offer instalment policies to pay off your CIL charge – but it’s not something they tend to advertise. 

Normally, it has to be specifically requested. It’s also more likely to be granted for large developments with significant liability.

If you genuinely can’t afford to pay CIL or it would be massively detrimental to your cash flow, don’t be afraid to ask if you can defer payment. 

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  • 5. Talk to CIL Officers

CIL Officers are experts at calculating charges – and they’re there to help. Sending any queries directly to them can help save you a lot of time, and you know you’re getting good advice as they’re the ones who collect the money and issue and review liability notices.

 

“Use CIL Officers. They are pretty good at what they do...If you have a query, contact them. They’re usually the quickest officers to come back on anything, including reviewing liabilities if you think they’re wrong.” – Peter Higginbottom

 

Catch all the insights in our on-demand webinar

To find out more about unravelling the mysteries of CIL, you can watch the full webinar down below.

During the session, you’ll learn:

  • What the intention is behind CIL
  • How CIL could impact you as a developer
  • How to avoid common mistakes associated with CIL

 

Watch the webinar on demand

 

Shannon is a Community Content Specialist at LandTech. Her marketing skills started young, when she designed the logo for her primary school (which they still use today). In fact, she's so persuasive, she once convinced John Bishop to give up his seat on a train (first class, no less).