In a recent case, the High Court has ruled in favour of the local planning authority in a dispute concerning a £32,000 Community Infrastructure Levy (CIL) charge.
The CIL was introduced in the Planning Act 2008 to allow local authorities to tax or charge new developments to fund the local infrastructure. It was primarily introduced in to order to charge commercial developers to contribute to the local infrastructure. For local planning authorities, who have adopted a CIL Charging Schedule, a CIL charge applies to a development which creates net additional floor space, where the gross internal area of the new build is 100 square metres or more.
There are a number of exemptions and reliefs from a CIL charge, one of which seeks to exempt self-build residential developments (so that, for example, homeowners extending their own properties/buildings/homes are not caught by the charge). However, more and more homeowners are unaware of, and being caught by, the requirements set out in The Community Infrastructure Levy Regulations 2010, namely the requirement to serve a commencement notice on the local planning authority BEFORE development commences in order to qualify for the CIL exemption.
Shropshire Council v The Secretary of State for Communities and Local Government
Case Details
A recent High Court case regarding CIL has ruled in favour of a local authority, that a self-builder had not previously served a valid commencement notice which provided him with exemption from a CIL charge, meaning he was liable to pay over £36,000.
Mr Jones obtained permission from Shropshire Council to build a detached house in Ellesmere, Shropshire. The CIL liability amount was assessed to be £36,861.43 but should be been subject to the Self-Build Exemption.
To qualify for the exemption, under the CIL Regulations, Mr Jones had to complete a commencement notice form which had to be filed with the local authority before any building work began. The main area of contention in this matter was that the Council claimed that this commencement notice was never filed. Whilst Mr Jones said he had sent an email to the Council which served as a commencement notice and that he had informed them that the building work would start on 11th July 2015.
Mr Jones lodged an appeal against the local authority’s CIL Demand Notice. The appeal Inspector sided with Mr Jones’ argument on the basis that he was content that the purpose behind the Regulations (Reg 67) “has been satisfied in spirit at least” and “the apparent failure to strictly comply with the terms of reg 67(2) should be put aside.”
However, Shropshire Council proceeded to challenge the Inspector’s findings in the High Court, where Judge Ockelton ruled in their favour. At paragraph 40 of the judgment, he said:
“The Regulations make perfectly clear that the consequence of failure to comply is loss of the exemption; and failure to comply means failure to submit a notice under reg 67. This step in the process appears entirely to have escaped the Inspector, who appears as a result to have decided that an indication of a commencement date wholly failing to meet the requirements of reg 67 was a commencement notice under reg 67. There is no other way in which his decision can be married with the regulations; but that conclusion verges on the irrational and is certainly insufficiently reasoned”
The Judge ruled that the email sent by Mr Jones was not sufficient enough notice of commencement in accordance with CIL Regulation 67, and that Mr Jones was required to pay the full CIL charge as described in the Council’s demand notice.
CIL Charge – Other Recent Cases
Another similar case is that of Mark Walker, who was looking to build an extension to his home in Rickmansworth, Hertfordshire, for his ill stepfather.
He obtained planning permission from Three Rivers District Council but did not formally notify them of the building commencement date, which started at the end of 2017. Subsequently, he has been told to stop the construction work and also been hit with a CIL charge of £24,274.
This case is still on-going.
Comment
These cases highlight that when it comes to commencement notices the statutory requirements will be strictly applied and the local authorities do not have the discretion to ‘bend the rules.’ Whilst it seems incredibly unjust that many people could fail to benefit from the exemptions that should be available to them, the wording of the legislation is unequivocal.
For anyone seeking to rely on reliefs or exemptions from CIL, it is vital to seek specialist advice at an early stage to avoid any costly mistakes.
How Can Nelsons Help?
Kylie Chapman is an Associate at Nelsons, specialising in all areas of planning law.
For more information on the points raised in this article or any other planning law matters, please call Kylie on 0800 024 1976 or contact us via our online form.