CIL indexation and the January rate change
The levy you pay is the adopted rate adjusted by an index that changes each January and keys to the year permission was granted. How the formula works and where the savings usually sit.
Community Infrastructure Levy charging schedules are indexed rather than rewritten, so the rate in the adopted schedule is almost never the rate you pay. The levy calculation multiplies the adopted rate by an index figure for the year permission was granted, divided by the index figure for the year the schedule took effect. The index applies from 1 January each year, which means a permission issued on 31 December and one issued a week later can carry different liabilities on identical schemes.
Why schedules are indexed rather than rewritten
Adopting a charging schedule is a formal process with evidence, consultation and independent examination. Councils are not going to run it annually to keep pace with construction costs.
The regulations solve that by building indexation into the calculation. The rate in the schedule stays as adopted, and inflation is handled by the index. A schedule adopted several years ago can therefore produce a liability materially above its headline figure without the council doing anything at all.
That is worth understanding at appraisal stage. Reading a rate per square metre off a council web page and using it directly will understate the levy on any scheme where the schedule is more than a year or two old.
Which index applies and when it is published
The levy regulations specify the index to be used. Since the amendments that took effect in 2020, the calculation uses a levy index published annually by the Royal Institution of Chartered Surveyors, replacing the tender price index used previously.
The figure is published in the autumn and applies from 1 January of the following year. So the number you need for a permission granted in any given calendar year is fixed and knowable before that year begins.
Councils are required to publish the rates as indexed, and most do, though the page is sometimes buried. Where the published figure and your own calculation disagree, work through the formula rather than assuming the council is right.
How the calculation uses the index
The chargeable amount for a development is the adopted rate, multiplied by the net chargeable floor area, multiplied by the index for the year permission was granted, divided by the index for the year the charging schedule took effect.
Four consequences follow, and they surprise people.
- The relevant date is the grant of permission, not the start on site. Delaying the start does not increase the levy through indexation.
- A schedule that took effect long ago produces a larger indexation uplift than a recent one, because the ratio between the two index figures is wider.
- The net chargeable area is not the gross area of the new building. Existing floorspace in lawful use for a qualifying period before permission can be deducted.
- Different rates can apply to different uses and different zones within one authority, so a mixed scheme needs the calculation done use by use.
The in-use building deduction is where the largest savings usually sit, and it is the item most often got wrong. The building has to have been in lawful use for a continuous period of at least six months within the three years before permission was granted. Evidence of that use, such as rates records, utility bills, leases or photographs, needs assembling while it still exists.
Phasing and index dates
A permission expressly granted in phases treats each phase as a separate chargeable development, with liability arising as each phase begins.
What phasing does not do is give each phase its own index year. The calculation still looks to the year permission was granted, so a ten year build-out does not accumulate indexation across the programme. That is a genuine advantage of securing a phased permission on a long scheme, and it is worth asking for expressly at application stage rather than assuming the permission will be read that way.
Variations under section 73 have their own treatment, and a new permission can change the index year. Take advice before applying to vary a condition on a scheme with a large levy liability, because the interaction is not intuitive.
Relief, exemptions and their timing
Every relief and exemption under the levy regime has the same fatal trap: it must be claimed, granted and confirmed before development starts, and the notice the regulations require before work begins must be submitted first.
The main categories are social housing relief, charitable relief, the self-build exemption for a dwelling, and the exemption for residential extensions and annexes. Each has its own form, its own evidence requirements and its own clawback period.
Start work a day early and the relief is lost. That is not a discretion the council can exercise, and appeals on the point have historically been unsympathetic. Put that notice on the construction programme as a gateway, with someone named against it.
The self-build exemption has a second stage as well, requiring evidence of completion within a set period after the dwelling is finished. Diary it at the point the first form goes in.
Checking the figure the council issues
The liability notice should show the components of the calculation. Check each one.
| Component | What to verify |
|---|---|
| Rate | Matches the adopted schedule for that use and zone |
| Net chargeable area | Deductions for qualifying in-use floorspace applied |
| Index for permission year | Correct published figure for the calendar year of grant |
| Index for schedule year | Correct figure for when the schedule took effect |
| Relief applied | Any granted relief shown and deducted |
Where the figure looks wrong, there is a formal route. You can request a review of the chargeable amount by the collecting authority within 28 days of the liability notice, and if that does not resolve it, appeal to the Valuation Office Agency within the period the regulations allow. Both routes have short deadlines, and both close once development has started, so act on the notice rather than filing it.
An illustrative example. A scheme replacing a small workshop with flats receives a liability notice with no deduction for the workshop floorspace. The applicant produces business rates records showing continuous occupation until eight months before permission was granted, which falls inside the qualifying window, and the review reduces the chargeable area accordingly. The evidence took an afternoon to find and was worth several times the fee on the application.
Budgeting the levy across a scheme
Treat the levy as a fixed cost determined at permission, with the index known in advance, and model it properly in the appraisal alongside any section 106 obligations.
Where the numbers threaten viability, the levy is far less flexible than planning obligations. It is a formula, not a negotiation, and exceptional circumstances relief is rarely available and rarely offered. That is why the argument usually has to be made through a Viability Assessment on the obligations rather than on the levy itself, and why the affordable housing position set out in the Affordable Housing Statement has to be consistent with it.
Enter your postcode on PlanScope to see which of the 66 report types your scheme is likely to need. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.
This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it.
Frequently asked questions
Which index is used for CIL?
Since the amendments taking effect in 2020 the calculation uses a levy index published annually by the Royal Institution of Chartered Surveyors, replacing the tender price index used previously. The figure is published in the autumn and applies from 1 January of the following year, so the number for a given calendar year is known before that year begins.
Does delaying the start on site increase the levy?
Not through indexation. The calculation uses the index for the year planning permission was granted, not the year development starts. Delay causes other problems, including the loss of instalment rights and of any relief where the notice required before work begins is not submitted in time, but the indexation figure itself is fixed at grant.
What floorspace can be deducted?
Existing buildings that have been in lawful use for a continuous period of at least six months within the three years before permission was granted can be deducted from the chargeable area. This is where the largest savings usually sit and it is the item most often got wrong. Gather rates records, leases, utility bills or photographs while the evidence still exists.
What happens if I start work before claiming relief?
The relief is lost. Every relief and exemption has to be claimed, granted and confirmed before development starts, and the notice the regulations require before work begins must be submitted first. The collecting authority has no discretion to forgive an early start, so treat that notice as a gateway on the construction programme with a named person responsible.
Can I challenge the liability notice?
Yes, through a formal route with short deadlines. Request a review of the chargeable amount from the collecting authority within 28 days of the notice, and if that does not resolve matters, appeal to the Valuation Office Agency within the period allowed by the regulations. Both routes close once development has started.
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.