The CIL index update and the charge on your permission

The cil index annual update is why the number on your liability notice does not match the rate printed in the council's charging schedule. The Community Infrastructure Levy is calculated by multiplying the schedule rate by the chargeable floor area and then by the ratio of two index figures: the index for the year your permission was granted, divided by the index for the year the charging schedule took effect. A new index figure applies from 1 January each year.

On a charging schedule adopted several years ago, that ratio does most of the work. A rate of £100 per square metre on paper can produce a charge well above £100 per square metre in practice, and the difference is arithmetic rather than error.

How the charge is calculated

Schedule 1 to the Community Infrastructure Levy Regulations 2010 sets out the calculation. In plain terms, for each rate that applies to the development:

• take the rate per square metre from the council's charging schedule for the relevant use and zone
• multiply by the chargeable area in square metres
• multiply by the index figure for the calendar year in which planning permission was granted
• divide by the index figure for the year in which the charging schedule took effect

Chargeable area is net additional floorspace, measured as gross internal area. New build floorspace counts, and from it you deduct the gross internal area of any existing buildings that are to be demolished or retained, provided those buildings qualify as in use. The in-use test requires lawful use for a continuous period of at least six months within the three years before permission was granted, and a building that has stood empty for years will not qualify.

That deduction is the largest variable on most small schemes. A self-builder replacing a bungalow that has been lived in until recently deducts its full floor area. The same bungalow empty for four years gives no deduction at all, and the charge can run into tens of thousands of pounds on a single plot.

Measure the existing building properly before demolition. Once it is down, the evidence is photographs and whatever drawings exist.

The annual index and when it takes effect

Indexation uses a published levy index, produced annually and in advance. The figure for a calendar year is published towards the end of the preceding year and applies from 1 January.

Three practical points follow. The index is fixed for the whole calendar year, so a permission granted on 2 January and one granted on 20 December use the same figure. The index is published before the year begins, so where the increase is material and a permission is close to being issued, you can calculate both outcomes and know what a December decision is worth compared with a January one. And councils have no discretion over the figure, so there is nothing to negotiate.

Where a charging schedule is replaced, the new schedule's own base year becomes the divisor for permissions granted under it. A council that has not reviewed its schedule for a decade therefore produces larger uplifts than one that refreshed last year, which is counter-intuitive and catches developers moving between authorities.

Which index value applies to your permission

The index year is the calendar year in which planning permission was granted, not the year you applied, not the year you start work and not the year you pay.

That matters in four situations:

1. A permission granted in late December uses that year's index even if the decision notice arrives in January
2. A permission granted on appeal uses the year of the appeal decision
3. A section 73 permission is a new permission, so it takes the index for the year the section 73 decision is issued
4. Reserved matters approvals do not create a new permission, so the outline permission's year governs

Point three is the expensive one. Varying a condition under section 73 on a permission granted four years ago brings the charge forward to the current index, and the recalculation under the regulations is done in a way that can produce a materially larger figure. Before applying to vary a condition on an older permission, ask what it does to the levy. Sometimes a non-material amendment under section 96A, which does not create a new permission, achieves the same result.

Why the figure differs from the schedule rate

Four reasons account for almost every discrepancy between what an applicant expects and what the liability notice says.

Indexation, as above. Multiple rates, where a scheme spans two charging zones or two use categories and the notice applies each rate to its own area. Mayoral or county-level levies in addition to the district charge, which in London means a Mayoral levy alongside the borough's. And a chargeable area larger than expected, usually because an existing building failed the in-use test or because gross internal area was measured differently.

The gross internal area point is worth labouring. It includes internal walls, stairwells and lift shafts at every floor, integral garages, and in many cases areas with restricted head height that an estate agent would never count. A figure taken from a sales brochure will understate it.

Where the notice applies a rate you did not expect, check the charging schedule in force at the date of permission rather than the current one. Schedules are replaced, and the one that governs is the one in effect when permission was granted.

Checking the liability notice arithmetic

The liability notice arrives after permission and states the chargeable amount. Check five things, in this order:

The rate, against the charging schedule in force at the date of permission, for the correct use and zone. The chargeable area, against your own gross internal area calculation for both new build and deductions. The two index figures, which should be the year of permission and the base year of the schedule. Any additional levy from another charging authority. And the arithmetic itself, which does occasionally contain transcription errors.

Then check the instalment policy. Councils publish their own, and the payment profile can spread the charge over months or require it in full shortly after work starts. A charge you can afford over three instalments may be unaffordable as a single payment, and the instalment policy is a published document rather than a negotiation.

Our note on section 106 payment triggers and the financial year covers the parallel cash flow question on obligations, which often lands in the same quarter.

Self-build and extension exemptions and their deadlines

The exemptions are real and generous, and they are lost more often by missing a procedural step than by failing to qualify.

Self-build exemption applies to a dwelling built by or on behalf of someone who will occupy it as their sole or main residence. The sequence is unforgiving. Assume liability, claim the exemption and receive the council's grant of it, then submit the start-of-works notice the regulations require (Form 6), and only then begin work. Start before the exemption is granted and it is lost, with no discretion to restore it. After completion there is a further claim stage within a set period, supported by evidence of the self-build, and an obligation to live in the dwelling for three years or repay the charge.

Residential extension exemption applies to an extension to your own home that creates new floorspace, and it follows the same procedural sequence. An extension below the minor development threshold is outside the levy altogether, so the exemption is for larger extensions.

Three mistakes that cost people the exemption. Starting work, including site clearance that counts as a material operation, before that notice is submitted. Treating the opening claim as the whole claim and missing the post-completion stage. And assuming the council will chase you, which it will not, because the regulations place the duty on the claimant.

Submit the start-of-works notice even where the exemption is granted. It is a separate requirement, and a surcharge applies for failing to submit it.

Reviewing the charge before paying

There is a formal route if the figure is wrong. A request for review of the chargeable amount goes to the collecting authority within a short window after the liability notice is issued, and if the review does not resolve it, an appeal on the chargeable amount is determined by the valuation office. Separate appeal routes cover apportionment, charitable and social housing relief, surcharges and the date the authority deems work to have started.

Two things to know. The windows are short, measured in days rather than months, and they run from the date of the notice rather than from when you read it. And the review is about the calculation rather than about whether the charge is fair, so an argument that the scheme cannot afford it will not succeed through this route.

Diarise the deadline the day the notice arrives, and get the arithmetic checked that week. The same discipline applies to the pre-start conditions that have to be discharged before that notice can honestly be given, which our note on discharging pre-start conditions in time for a spring start deals with. Where surveys and fees straddle a year end, phasing a survey budget across two financial years covers the budgeting side.

A note on the policy horizon. The Levelling-up and Regeneration Act 2023 contains powers for an Infrastructure Levy intended to replace the current levy, and as at October 2026 those powers have not changed how a charge on an existing permission is calculated. Check the current position on gov.uk before assuming any change applies to your scheme.

Browse the report types to see which documents a self-build application usually carries.

This is general guidance, not legal or tax advice. Check the position with your collecting authority or a qualified professional before relying on it. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.