Permitted development and Community Infrastructure Levy
There is no planning permission for the council to attach a liability notice to, so the duty to notify falls on you. The in-use building test decides whether a conversion is chargeable at all.
Community Infrastructure Levy liability does not depend on having a planning permission from the council. Development carried out under the General Permitted Development Order 2015 can be chargeable, and because there is no application for the collecting authority to attach a liability notice to, the duty falls on you to tell them. That duty is the notice of chargeable development, and missing it is the most expensive administrative error available in permitted development.
The two situations that catch people are an office or commercial building converted to flats, where the building has been empty too long to offset its floorspace, and a larger householder extension where the exemption was available but never claimed.
When the levy applies without a planning permission
The levy is charged on chargeable development. Where planning permission comes from a development order rather than from a decision notice, the Community Infrastructure Levy Regulations 2010 treat the development as a chargeable development in its own right, with the notice of chargeable development taking the place of the permission for procedural purposes.
Two tests decide whether anything is chargeable at all. Development creating less than 100 m² of new build gross internal area is not liable, provided it does not create a dwelling. Development creating one or more dwellings is liable whatever its size, subject to the reliefs and exemptions.
So a 40 m² rear extension under Class A is outside the levy. A studio flat of 30 m² created under a prior approval is inside it. That asymmetry is the whole point of the regime, and it takes people by surprise on small conversions.
Note first whether the authority charges the levy at all. Not every local planning authority has adopted a charging schedule, and a few charge only in some zones or on some uses. Check the council's own charging schedule before doing any arithmetic, and check whether the site sits in a zone with a nil rate.
The notice of chargeable development
The notice is a prescribed form submitted to the collecting authority, which is usually the district or unitary council, before development begins.
It has to identify the land, describe the development, state the gross internal area being created and the floorspace being demolished or retained, and identify the permitted development right relied upon. Attach plans with the areas marked and a schedule showing how each figure was derived.
What follows is the same sequence as for any chargeable development. The authority issues a liability notice setting out the chargeable amount. Someone assumes liability on the prescribed form. A commencement notice is served before work starts. Then a demand notice follows and payment falls due according to the authority's instalment policy, if it has one.
Submit the notice early rather than on the eve of commencement. The chargeable amount is calculated by reference to the date the notice is received, so an early notice also fixes the index figure used, and it gives you time to argue about the floorspace calculation before the money is due.
Chargeable area and the in-use building test
The chargeable amount is based on net additional floorspace, which means existing floorspace can be deducted. Whether it can be deducted turns on one condition that decides more conversion schemes than the rate itself.
A building's existing floorspace can be offset only where the building is an in-use building, meaning a relevant part of it has been in lawful use for a continuous period of at least six months within the three years ending on the day the notice of chargeable development is received.
Read that against a typical permitted development conversion. An office vacant for four years, converted to flats under a prior approval, cannot offset any of its floorspace, so the entire converted area is chargeable even though not one square metre is new. A building that was occupied until last year can offset the lot, and the chargeable amount may be nil.
The consequences for how you buy and programme are direct:
- get evidence of the last lawful occupation before you exchange, including leases, business rates records, utility accounts and correspondence
- where occupation ended recently, work out the date on which the three-year window closes and submit the notice before it does
- where a building is nearly at the limit, a short period of lawful occupation can preserve the offset, but the use must be lawful and the six months continuous
- where the offset is lost, price the levy into the acquisition rather than discovering it at commencement
Demolition and retained floorspace are treated differently again, and the calculation in the Regulations is fiddly. Ask the collecting authority for its own calculation of the chargeable amount in writing before you commit.
Exemptions worth claiming, and when to claim them
Three exemptions matter for the permitted development audience, and two of them have to be claimed and granted before work starts.
The minor development exemption applies automatically where less than 100 m² of new build is created and no dwelling results. Nothing to claim.
The residential extension exemption applies to an extension to your own home where you own the dwelling and occupy it as your principal residence. It has to be claimed on the prescribed form and granted by the authority before development begins. This is the one householders lose by starting work first, particularly on larger extensions taken forward under prior approval. Our note on Class AA upward extensions covers a right that frequently produces a chargeable area.
The self-build exemption applies to a dwelling built by or on behalf of someone who will occupy it as their sole or main residence. It also has to be claimed and granted before commencement, and it carries a clawback period during which the property must remain the owner's main residence.
A residential annex exemption exists on similar terms where the annex is within the curtilage of the main dwelling and is ancillary to it. Where the annex is capable of separate occupation, the position changes.
For all of the claimed exemptions the sequence is the same: submit, wait for the grant, then serve the commencement notice, then start.
Timing the notices against the start of work
The order is not optional, and each step has a consequence attached.
- Submit the notice of chargeable development before commencement.
- Receive the liability notice from the authority.
- Submit the assumption of liability form, naming who will pay.
- Submit any exemption or relief claim and wait for it to be granted.
- Submit the commencement notice, stating the intended start date, before work begins.
- Begin development.
Commencement for these purposes is the carrying out of a material operation, which is a low bar. Demolition, site clearance, digging a trench for foundations and laying out a road can all count. A contractor who turns up to clear the site while the exemption claim is pending has begun your development.
Where the development is phased, the phasing has to be recognised in the notices; a prior approval scheme is not automatically phased for levy purposes.
What happens when a notice is missed
The Regulations attach consequences at each stage, and they compound.
Failing to submit a notice of chargeable development or to assume liability attracts a surcharge. Failing to serve a commencement notice attracts a further surcharge and removes the benefit of any instalment policy, so the whole chargeable amount becomes payable immediately. Any claimed exemption or relief lapses if development begins before the commencement notice is served, and the exemption cannot be reinstated afterwards.
Beyond surcharges, the authority can serve a CIL stop notice prohibiting further development until payment is made, register the amount as a local land charge, and pursue recovery through the courts. A land charge is what turns a levy problem into a sale problem.
The practical protection is dull and effective. One person responsible for the levy forms, a written instruction to the contractor not to carry out any operation on site until they have written clearance, and a copy of the served commencement notice in the project file.
Budgeting the liability
The chargeable amount is the rate in the council's charging schedule, expressed in pounds per square metre for the relevant use and zone, applied to the net chargeable area and adjusted by an index.
The index is published annually and the figure applied is the one in force when the notice of chargeable development is received, so the liability on a scheme that slips a year is not the liability you calculated. Rates themselves are set locally and revised when the authority reviews its schedule.
Get the council's charging schedule, identify the rate for the use you are creating, apply it to your own area calculation, and then ask the authority to confirm the figure. Treat any difference between your calculation and theirs as a negotiation about floorspace, because that is what it usually is.
The Levelling-up and Regeneration Act 2023 contains powers for a replacement Infrastructure Levy, which has not been brought into general operation. The Community Infrastructure Levy remains the regime in force, so verify the current position on gov.uk before relying on any transitional assumption.
Where a fallback under permitted development forms part of the case for a full application, a planning statement is the document that sets out both routes, and our notes on how the prior approval procedure works and on the structural works test in a Class Q conversion cover the procedural detail.
This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it, and remember that a Lawful Development Certificate is the only formal way to confirm that works are lawful. To see which documents a conversion at your address is likely to need, enter your postcode on PlanScope.
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 permitted development attract the levy?
It can. Where permission comes from the General Permitted Development Order 2015 rather than a decision notice, the development is still a chargeable development, and you must serve a notice of chargeable development on the collecting authority before starting work. Development under 100 square metres of new build creating no dwelling is outside the levy.
What is the in-use building test?
Existing floorspace can be offset against the chargeable area only where a relevant part of the building has been in lawful use for a continuous period of at least six months within the three years ending on the day the notice of chargeable development is received. A long-vacant building fails it, so the whole converted area becomes chargeable.
Which exemptions have to be claimed before starting work?
The residential extension exemption, the residential annex exemption and the self-build exemption all have to be claimed on the prescribed form and granted before development begins. The minor development exemption for under 100 square metres with no new dwelling is automatic. Starting work first loses the claimed exemptions permanently.
What counts as commencement?
The carrying out of a material operation, which is a low bar. Demolition, site clearance, digging a foundation trench and laying out a road can all qualify. A contractor clearing the site while an exemption claim is pending has begun your development, which is why written clearance to the contractor matters.
What are the consequences of missing the commencement notice?
A surcharge, the loss of any instalment policy so the full amount falls due immediately, and the lapse of any exemption or relief already granted. The authority can also serve a CIL stop notice, register the debt as a local land charge and pursue recovery, which turns a levy problem into a sale problem.
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.