Worked example: CIL chargeable area with a building offset
The levy is charged on new floorspace minus qualifying existing floorspace. This worked illustration shows how the offset is measured, evidenced and lost.
The chargeable area for the Community Infrastructure Levy is the gross internal area of the new build, minus the gross internal area of any qualifying existing buildings on the site. Get the offset wrong and the bill can move by tens of thousands of pounds, because a CIL chargeable area example turns on two questions only: what counts as gross internal area, and whether the existing building was in lawful use for six months in the right three year window.
Everything below follows the Community Infrastructure Levy Regulations 2010 as amended. The rate itself comes from the charging authority's own schedule, so the figures here are illustrative and are not any authority's published rate.
Measuring gross internal area
Gross internal area is measured to the internal face of the external walls, at every floor level, including areas that people rarely think of as floorspace.
That means internal walls and partitions, structural columns, stairwells and lift shafts, plant rooms, internal storage, integral garages, and mezzanines with permanent access are all inside the measurement. Open balconies, external terraces, canopies over open areas and open car ports sit outside it. Loft space without a permanent stair is generally excluded, while a room in the roof with a fixed stair is not.
Two habits cause most disputes. The first is measuring from drawings marked with net internal or net saleable areas, which are smaller by design. The second is forgetting that a basement counts in full even where it is entirely below ground and used only for parking.
The existing building offset test
The offset only applies to what the Regulations call an in-use building. The test has two parts, and both have to be met.
The building must be situated on the relevant land on the day planning permission first permits the chargeable development. And it must contain a part that has been in lawful use for at least six continuous months within the three years ending on that same day. The six month figure replaced the earlier twelve month requirement through the 2014 amendment regulations, which widened the offset considerably for buildings that had been standing empty.
Lawful use means use in accordance with planning control, so an unauthorised office in a barn does not qualify unless it has become lawful through the passage of time and can be evidenced.
Setting out the illustrative calculation
Take a site with a single storey workshop of 180 m2 gross internal area, occupied by a joinery business until eight months before the application was determined. The proposal demolishes it and builds four flats totalling 520 m2 gross internal area.
The workshop was standing on the relevant land when permission was granted and was in lawful use for more than six continuous months inside the preceding three years, so it qualifies for the offset.
- Measure new build gross internal area: 520 m2.
- Measure the qualifying existing building: 180 m2.
- Deduct the second from the first: 340 m2 of chargeable area.
- Apply the charging schedule rate for the zone and the use, which for this illustration is £100 per m2.
- Apply indexation using the index figures for the year the schedule took effect and the year permission was granted.
At an illustrative rate of £100 per m2, the chargeable amount before indexation is £34,000 rather than the £52,000 that the new build area alone would produce. The offset is worth £18,000 in this illustration, which is why the evidence for it deserves real attention.
Indexation and how it applies
The chargeable amount is not simply rate multiplied by area. The Regulations index the figure using the formula R x A x Ip over Ic, where R is the rate in the charging schedule, A is the chargeable area, Ip is the index for the year permission was granted and Ic is the index for the year the charging schedule took effect.
Since the 2019 amendment regulations, charging authorities publish the index figure annually by 31 December for the following year, drawn from the RICS cost index. The practical effect on an older charging schedule is a material uplift, so never budget from the headline rate alone. Check the authority's published figure for the relevant year.
Where demolition affects the offset
Demolishing early is the single most expensive mistake on this topic.
A building has to be standing on the relevant land on the day permission first permits development to be a relevant building at all. Clear the site while the application is still under consideration and the offset disappears with the rubble, even though the building was in lawful use for years beforehand. The saving on site clearance costs is dwarfed by the levy.
Where demolition is unavoidable before determination, take measured survey drawings, dated photographs and a record of the last lawful occupation first. Some authorities will accept evidence of a building demolished under a separate consent, but the Regulations are drafted around the building existing on that day, so do not plan around an exception.
Evidence the authority requires
The offset is claimed on the CIL additional information form submitted with the application, and the charging authority can ask for proof. What holds up:
- measured floor plans of the existing building with gross internal area annotated per level
- a lease, licence, business rates record or utility bills covering the six month period relied on
- photographs showing the building in occupation, dated
- confirmation that the use was lawful, or a lawful development certificate where there is any doubt
Where the existing building is in mixed use, the offset applies to the parts in lawful use, so the survey needs to separate them. A planning statement that narrates the occupation history alongside the drawings saves a round of correspondence with the levy officer.
Reliefs, deadlines and the surcharge trap
Several reliefs and exemptions sit alongside the offset. Residential extensions of less than 100 m2 that do not create a dwelling, residential annexes, self-build housing, social housing relief and charitable relief all have their own forms and conditions.
All of them share one rule that catches people. Liability must be assumed and the relief or exemption granted in writing before development starts, and the start notice required by the Regulations (Form 6) must be served. Start work first and the relief is lost, surcharges apply, and the full amount becomes payable immediately. On a self-build exemption there is also a three year clawback period during which the property must remain the applicant's main residence.
If you are budgeting a householder scheme, our note on the planning statement for a green belt householder extension covers the supporting document side of the same application.
Checking the charging schedule rate
Rates vary by zone, by use and sometimes by unit size within a single authority, and many schedules carry different figures for residential, retail and everything else. Some areas have no levy at all and rely on section 106 obligations instead.
Find the adopted charging schedule and the instalments policy on the authority's own website, then read the zone map rather than assuming the rate for the town applies to your postcode. Neighbouring streets can sit in different zones.
Draft the supporting documents for the application on PlanScope and see the full list of report types your scheme is likely to need, or check pricing before you start.
This is general guidance, not legal advice; check the position with your local planning authority or a qualified professional before relying on it. The calculation above is illustrative. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.
Frequently asked questions
Does a building have to be occupied when permission is granted?
No. It has to be standing on the land on the day permission first permits the development, and to have contained a part in lawful use for at least six continuous months within the three years ending on that day. A building empty for the last few months of that period can still qualify if the earlier occupation is evidenced.
Is a basement included in gross internal area for CIL?
Yes, in full, measured to the internal face of the external walls, even where it is wholly below ground and used only for parking or plant. Open car ports, balconies and canopies over open areas are excluded. Working from net internal areas on a drawing is the most common measurement error.
What happens if I demolish the existing building before permission?
You usually lose the offset. The Regulations require the building to be on the relevant land on the day permission first permits the chargeable development, so clearing the site early removes it from the calculation. Take measured drawings, dated photographs and occupation evidence before any demolition contract starts.
How does indexation change the amount payable?
The chargeable amount is the rate multiplied by the chargeable area, then adjusted by the index for the year permission was granted over the index for the year the schedule took effect. Charging authorities publish the annual figure by the end of each December, so an older schedule produces a bill well above its headline rate.
Can I claim the self-build exemption after starting work?
No. Liability must be assumed and the exemption granted in writing before development starts, with the required start notice served on the charging authority. Starting first means the exemption is lost, surcharges are added and the full amount falls due at once. A three year clawback period also applies to self-build homes.
Sources and further reading
This article is general guidance about the planning system in England and, where stated, the rest of the UK. It is not legal or professional advice. Check your local planning authority’s validation requirements and take professional advice for your specific site.