CIL instalment policies and the cost of missing a date
Instalment policies are local, not national, and the right to use one is fragile. One late payment collapses the schedule into a single immediate debt.
A CIL instalment policy is a local document, not a national rule, and the right to pay by instalments is conditional. Every collecting authority may publish its own policy setting out how the Community Infrastructure Levy is spread across a build, and if it has not published one, the default under the Community Infrastructure Levy Regulations 2010 is payment in full within 60 days of the start of development. Where a policy does exist, the benefit of it can be lost twice over: by failing to submit the notice required before work starts, and by missing a single instalment date afterwards.
That second one is the trap developers underestimate. Missing an instalment does not simply move the payment. It ends the instalment arrangement and makes the whole outstanding balance payable immediately.
How an instalment policy works
A policy bands the chargeable amount and sets a payment schedule for each band. Small charges are typically payable in one sum, larger ones in two or three tranches at defined intervals after the development starts.
The intervals are measured from the start of development rather than from the date of the demand notice, which matters because the two are not the same. A contractor who starts on site earlier than programmed has moved every payment date forward.
The policy that applies to your development is the one in force at the relevant date for that permission, not the one on the authority's website when you happen to look. Policies are revised, and a policy introduced or withdrawn after your permission was granted may not be the one you get. Ask the collecting authority to confirm in writing which policy applies to your liability notice, and keep the reply with the file.
No policy at all is a real possibility. Some charging authorities have never published one, and in those areas the 60-day default is the whole of the story.
What the policy actually covers
Read the policy for four things.
The bands, and where your chargeable amount sits within them. A scheme just above a band boundary can have a materially different payment profile from one just below it.
The intervals, expressed as days from the start of development.
Whether the policy applies to all chargeable developments or excludes some, for instance where relief or an exemption has been claimed.
Whether indexation is applied to each instalment or calculated once. This affects the total where a build runs over more than one indexation period.
One point on eligibility that catches people repeatedly. The instalment right depends on the commencement notice having been submitted before development began. No notice means no instalments, regardless of what the policy says, plus a surcharge on top.
Missing one instalment
The regulations treat a missed instalment as the end of the arrangement. Where an instalment is not paid in full by its due date, the whole of the outstanding amount becomes payable immediately.
So a scheme with three instalments that pays the first on time and the second eleven days late does not owe a late payment on the second tranche. It owes the second and third tranches in full, at once, with the late payment consequences attaching to the lot.
There is no discretion to reinstate the schedule as of right. Some authorities will engage on a payment arrangement, particularly where the delay was administrative, and that is a negotiation rather than an entitlement. Approach it immediately and in writing.
The practical protection is dull and effective. Put every due date in the project cash flow as a hard milestone with a named owner, set a reminder two weeks before each one, and confirm receipt of each payment with the collecting authority rather than assuming the transfer landed on the right account reference.
Interest, surcharges and enforcement
Late payment attracts a surcharge calculated as a percentage of the overdue amount subject to a minimum figure, escalating where the debt remains unpaid at six months and again at twelve. Interest runs on the outstanding amount at a rate set by reference to the Bank of England base rate plus a margin. Take both figures from the current regulations, because they have been amended.
Beyond that, the enforcement powers are stronger than most developers expect. A collecting authority can recover the levy as a debt, apply to the magistrates court for a liability order, take enforcement action against goods, seek a charging order against the land, and in extreme cases apply for committal. It can also serve a stop notice prohibiting further development until payment is made.
The stop notice is the one that hurts a programme. A site stopped mid-frame while a payment dispute is resolved costs far more than the levy did.
Those powers are used rarely and they exist. Treat the levy as a secured creditor rather than a bill that can wait until the next drawdown.
Phased permissions and separate chargeable developments
Where a planning permission is a phased permission, each phase is treated as a separate chargeable development. That has three consequences worth planning around.
Each phase gets its own liability notice and its own chargeable amount, so the band it falls into is determined phase by phase rather than across the scheme. A large scheme split into six phases may sit in a lower instalment band six times over, which usually improves the profile.
Each phase needs its own commencement notice. Forgetting the notice for phase four, after three phases handled correctly, is a recognisable and expensive mistake.
The payment clock for each phase runs from the start of that phase, so the phasing plan and the cash flow have to be the same document.
Getting the phasing defined properly in the permission is therefore a levy decision as much as a programming one. Where phases are not clearly defined in the permission, the authority may treat the whole development as a single chargeable development, and the instalment profile changes accordingly.
Cash flow across a build programme
The levy competes with everything else for cash in the first months on site, which is the worst possible timing.
The other early obligations on a small or medium scheme land in the same window. Section 106 contributions with commencement triggers. Highway works under separate agreements, priced and programmed as set out in section 278 and section 38 costs on a small scheme. Utility connection charges, which are covered in utility connection budgets for a single new dwelling and which are payable well before any revenue arrives.
Model them together on a single sheet with dates, not as separate line items in a budget. The question that matters is not what the levy costs but what month it lands in, and whether the facility covers that month.
Where the profile does not work, the options are limited and worth considering early: redefine the phasing before permission is granted, delay the start date so a payment falls after a drawdown, or fund the charge separately. None of them are available once a demand notice has been issued.
Confirming the policy that applies
A short written exchange with the collecting authority before you start on site settles almost everything:
- Confirm which instalment policy applies to this permission, with its adoption date.
- Confirm the chargeable amount as indexed, and whether indexation applies per instalment.
- Confirm the due dates as days from the start of development.
- Confirm the payment reference and the account to use.
- Confirm the position where a phase start slips, and what notification is expected.
- Ask for confirmation that the commencement notice has been received and accepted.
That last item takes one line and prevents the worst outcome in the whole regime. A commencement notice that was sent but never registered looks identical to one that was never sent, until the surcharge arrives.
To scope the application documents that come before any of this, the index of report types by category sets out what each one covers, and PlanScope pricing shows what a drafted starting point costs against a consultant quote.
This is general guidance, not legal advice. Check the current regulations and 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.
Frequently asked questions
What happens if I miss one CIL instalment?
The instalment arrangement ends and the whole outstanding amount becomes payable immediately, with late payment surcharges and interest applying to that balance. There is no right to have the schedule reinstated. Some authorities will discuss an arrangement where the delay was administrative, but that is a negotiation rather than an entitlement.
Does every council have an instalment policy?
No. A collecting authority may publish one and many have, but where none exists the regulations default to payment in full within 60 days of the start of development. Ask the authority to confirm in writing which policy applies to your liability notice, because policies are revised over time.
Do instalments apply if I forgot the commencement notice?
No. The benefit of an instalment policy depends on the commencement notice having been submitted before development began. Without it the full amount falls due shortly after the deemed start date and a surcharge is imposed as well, which is the most expensive administrative failure in the levy system.
Are the phases of a scheme charged separately?
Where the permission is a phased permission, each phase is a separate chargeable development with its own liability notice, its own chargeable amount and its own commencement notice. That often improves the instalment profile, because each phase is banded individually rather than the scheme being banded as a whole.
Can the council stop my site for non-payment?
Yes. Among the enforcement powers in the regulations is a stop notice prohibiting further development until payment is made, alongside recovery as a debt, liability orders, action against goods and charging orders against the land. These powers are used rarely, and a stopped site costs far more than the levy.
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.