CIL relief for charities and social housing
Relief from the community infrastructure levy is lost if work starts before the claim is decided. The conditions, the procedure and the clawback events.
CIL charitable relief is not automatic, it is not granted with the planning permission, and it is lost entirely if a spade goes in the ground before the charging authority has decided the claim. That last point costs charities and housing providers more money than any technical argument about eligibility, and it happens several times a year on schemes where everyone assumed the levy had been dealt with.
The Community Infrastructure Levy Regulations 2010, as amended, contain two families of relief that matter here: charitable relief under regulations 43 and 44, and social housing relief under regulation 49 and its discretionary extension. Each has its own conditions, its own form and its own clawback period.
Mandatory charitable relief and its conditions
Regulation 43 gives mandatory relief from the levy where three things hold. The claimant is a charitable institution that owns a material interest in the land. The chargeable development will be used wholly or mainly for charitable purposes of that institution, or of that institution and other charities. And the relief would not amount to unlawful subsidy.
Each limb does work. A material interest means a freehold or a lease with more than seven years left to run at the time of the claim, so a charity occupying under a short lease cannot claim on the landlord's development. Wholly or mainly for charitable purposes is a test on the use of the building, not on the identity of the occupier, so a charity building offices to let commercially does not qualify under this regulation.
Mixed schemes are apportioned. A church hall with a nursery run by the charity and two flats let at market rent will attract relief on the charitable floorspace and a charge on the rest, calculated on the chargeable floor area.
Discretionary relief and whether your council offers it
Regulation 44 allows relief where the building will be held as an investment from which the profits are applied to charitable purposes. It is discretionary, and it exists only where the charging authority has published a document giving notice that discretionary relief is available in its area.
Check that first. Many authorities have never published the notice, and without it the relief cannot be granted however good the case. Where the notice exists, it will set out the authority's conditions and the evidence it wants, usually the charity's objects, the mechanism by which profits reach charitable purposes and confirmation of the tenure.
Discretionary relief also carries subsidy control considerations, which is why authorities look closely at schemes where the charitable body competes in a commercial market.
Social housing relief and qualifying tenures
Regulation 49 gives mandatory relief for qualifying dwellings, which cover the main social and affordable rented tenures and shared ownership arrangements meeting the specified conditions. The relief is calculated on the gross internal area of the qualifying dwellings as a proportion of the whole.
The definitions are tenure specific and they have been amended more than once, so read the current text rather than relying on a note from a previous scheme. Discounted market sale products qualify only where the charging authority has adopted the discretionary extension and the product meets its published criteria. First Homes sit in that territory, and the interaction with the section 106 obligation is covered in First Homes: the discount and how the obligation works.
Where the tenure split is still under negotiation when the application is determined, the relief claim has to follow the final agreed mix, which is one reason the levy calculation is usually revisited after the section 106 is completed. The negotiation itself is set out in affordable housing tenure split, and the evidence for it normally sits in the affordable housing statement.
Claiming before anyone starts work
The procedure is unforgiving and it runs in a fixed order.
- Someone assumes liability for the levy, on the prescribed form, before development begins.
- The charging authority issues a liability notice setting out the chargeable amount.
- The relief claim is submitted on the prescribed form, with the supporting evidence, and the authority determines it.
- The prescribed notice of the intended start date is submitted to the collecting authority, and only then does work begin.
Take those steps out of order and the consequences are severe. Relief lapses if the chargeable development begins before the authority has notified its decision on the claim. Starting work without that notice removes the right to pay by instalments and exposes the liable party to surcharges.
Demolition, site clearance and service diversions can all count as the start of development, which is the trap. A contractor mobilising early, or an enabling works package let under a separate contract, has ended the relief before anyone in the finance team knew the works had started. Write the sequence into the pre-start checklist and give the site manager a date before which nothing may happen.
Instalment policies apply to the balance that remains chargeable, and cash flow planning should assume the authority's published policy, as explained in CIL instalment policies and development cash flow.
The clawback period and disqualifying events
Relief is conditional for seven years beginning with the day the development begins. A disqualifying event during that period makes the relieved amount payable.
For charitable relief the event is, broadly, a change that means the qualifying conditions are no longer met: the building ceasing to be used wholly or mainly for charitable purposes, or the charity disposing of its material interest to someone who does not qualify. For social housing relief the events centre on a qualifying dwelling ceasing to qualify, which includes a sale outside the permitted arrangements.
Two practical points follow. A right to buy or voluntary sale within the clawback window creates a levy liability that has to be provided for in the business plan. And a change of occupier in a charitable building, for example letting a wing to a commercial tenant to cover running costs, can trigger a charge on a building that has been open for five years.
The liable party must notify the charging authority of a disqualifying event within a set period. Missing that notification attracts a surcharge on top of the levy.
Where several exemptions sit on one site
Mixed schemes often combine reliefs: social housing relief on the affordable units, charitable relief on a community building, and a self build exemption or a residential extension exemption claimed by an individual plot owner on a serviced parcel.
Each claim is made separately, by the person with the material interest in that part, and each carries its own clawback period. Self build exemptions run on a shorter window than the seven years that applies to charitable and social housing relief, so a single spreadsheet tracking every claim, its date and its expiry is the only way to manage a phased site.
Apportionment between reliefs is done on floor area. Get the areas agreed with the authority in writing at liability notice stage, because arguing about gross internal area after work has started is much harder.
Records to keep
Keep the paperwork for the full clawback period and hand it over at sale. That means the assumption of liability, the liability notice, the relief claim and the decision, the start date notice, the approved plans with the areas marked, and the tenure schedule for every qualifying dwelling.
Add a diary entry for the seventh anniversary of the start date. Until then, any change of use, tenure or ownership within the relieved floorspace needs checking against the disqualifying events before it is agreed.
PlanScope drafts the supporting statements that sit alongside a levy claim, including the affordable housing and viability evidence, from your postcode and a few answers about the scheme. See pricing for the report options.
This is general guidance, not legal advice; check the position with your local planning 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
When must a CIL relief claim be submitted?
After liability has been assumed and the liability notice issued, and before development begins. Relief lapses if the chargeable development begins before the charging authority has notified its decision on the claim. Because demolition and site clearance can count as the start of development, the practical rule is that nothing happens on site until the decision and the start date notice are both in place.
Does a charity get relief on a building it lets commercially?
Not under the mandatory relief in regulation 43, which requires the development to be used wholly or mainly for the charitable purposes of the institution. Investment property held to generate profits applied to charitable purposes falls under the discretionary relief in regulation 44, which is only available where the charging authority has published a notice making it available.
How long is the CIL clawback period?
Seven years beginning with the day the development begins, for both charitable and social housing relief. A disqualifying event in that period, such as a relieved dwelling being sold outside the permitted arrangements or a charitable building ceasing to be used for charitable purposes, makes the relieved amount payable and must be notified to the authority.
What counts as a material interest in the land?
A freehold interest, or a leasehold interest with more than seven years left to run at the time the claim is made. A charity occupying under a shorter lease cannot claim relief on a landlord's development, which is a common obstacle where a community organisation is the end user but not the developer.
Can social housing relief be claimed before the tenure mix is agreed?
The claim has to reflect the tenure that will actually be delivered, so on schemes where the mix is still being negotiated in the section 106 the levy calculation is usually revisited once the agreement is completed. Agree the gross internal areas for each qualifying dwelling with the authority in writing at liability notice stage.
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.