Community Infrastructure Levy: how liability arises

The Community Infrastructure Levy (CIL) is a charge per square metre of new floorspace that becomes payable when a planning permission first permits development in an area where the council has adopted a charging schedule. Liability arises automatically. Nobody negotiates it, no officer decides it, and the amount is fixed by the schedule, the floorspace and an index. For a self-builder the practical question is rarely whether CIL applies to a new dwelling (it does, whatever the size) but whether the exemption survives the paperwork, because the exemption is lost or surcharged far more often than it is refused.

What CIL is and who sets the rate

CIL was created by Part 11 of the Planning Act 2008 and is run under the Community Infrastructure Levy Regulations 2010 as amended. The charging authority is the district, borough or unitary council, and in London the Mayor also charges a separate Mayoral CIL on top of the borough's rate. A council can only charge if it has a charging schedule that has been through examination and formally approved, so the first check is whether your council has one at all. Some still do not.

The schedule sets rates in pounds per square metre, usually by use (residential, retail, everything else) and often by zone, so a house in one village can carry a different rate from a house three miles away. The figure in the schedule is not the figure you pay. Regulation 40 requires the council to index it, and since 2020 the index has been the RICS CIL Index, applied each January. That is why a liability notice issued this year shows a higher number than the schedule adopted several years ago.

CIL sits alongside section 106 obligations rather than replacing them. A section 106 agreement deals with site-specific matters such as affordable housing or a highway junction. CIL is a tariff for infrastructure generally. A minor scheme can attract both.

How chargeable floorspace is measured

Liability is measured in gross internal area (GIA), which is the floor area inside the external walls, including internal walls, stairs and cupboards. Regulation 42 exempts development where the new build GIA is less than 100 m², but that exemption does not apply where the development comprises one or more dwellings. A 70 m² bungalow is chargeable. A 95 m² warehouse extension is not.

Existing buildings on the site reduce the chargeable area if they qualify as in-use buildings, meaning they have been in lawful use for a continuous period of at least six months within the three years before the permission first permits development. Their GIA is deducted from the new floorspace, whether they are being demolished or retained and converted. A derelict barn that has stood empty for four years usually does not qualify, and a conversion of it can be fully chargeable even though no new floorspace is created. Where a piece of land is used in more than one way, the planning unit the council recognises can decide which buildings count as being in lawful use.

Permission "first permits" development on the date a full permission is granted, or, for an outline permission, when the last reserved matters are approved. Permitted development can also be chargeable, which is why a prior approval conversion creating new flats requires a notice of chargeable development before work starts. The point at which more intensive use of a building becomes development in its own right is explained in intensification: when doing more becomes development, and the same question can affect whether floorspace counts as new.

The forms and the order they must be filed in

The forms are published by the Planning Portal and the order is not optional. Filing one out of sequence is the single most common way self-builders lose an exemption.

1. Form 1, CIL Additional Information, goes in with the planning application. Most councils list it as a validation requirement.
2. After permission, the council issues a liability notice under regulation 65 stating the chargeable amount.
3. Before any work starts, submit Form 2, Assumption of Liability, under regulation 31. Without this the council cannot process an exemption in your name.
4. Still before any work starts, submit the exemption claim: Form 7 Part 1 for self-build housing, Form 8 for a residential annex, Form 9 for a residential extension. Wait for the council to grant it in writing.
5. Submit Form 6, Commencement Notice, no later than the day before work begins, as regulation 67 requires. State the actual date.
6. The council then issues a demand notice under regulation 69 for whatever remains payable, and payment falls due under the council's instalment policy or, where there is none, in full within 60 days of commencement.

"Commencement" carries its planning meaning. Digging a foundation trench, laying a drain or forming an access all count, and so does demolition where it is part of the permitted scheme. Tell your groundworker the date matters.

Self-build and residential extension exemptions

The self-build exemption in regulation 54A covers a dwelling built, or commissioned, by a person who will occupy it as their sole or main residence. The claim is made on Form 7 Part 1 before work starts, and then within six months of the completion certificate you must submit Form 7 Part 2 with the evidence regulation 54C lists: proof of title, a council tax bill, a utility bill, and one of an approved VAT refund claim for a DIY housebuilder, a specialist self-build warranty or an approved self-build mortgage. Miss the six-month deadline and the exemption is lost in full.

The exemption then carries a clawback period of three years from completion. Under regulation 54D, selling the house, letting it out or ceasing to occupy it as your main home during that period is a disqualifying event, and the full CIL becomes payable. Keep the paperwork, because the council can ask for it at any point in those three years.

The residential annex and extension exemption in regulation 42A applies where you own a material interest in a dwelling, occupy it as your sole or main residence, and are building either an annex wholly within its curtilage comprising one new dwelling, or an extension to it. Extensions under 100 m² are not chargeable anyway, so this exemption only matters for very large additions, but annexes are chargeable from the first square metre because they are dwellings. The annex carries the same three-year clawback if it is sold or let separately from the main house.

Why missing a commencement notice is expensive

Before the regulations were amended in 2019, starting work without a commencement notice removed the exemption entirely, and self-builders paid five-figure sums for a missed form. That has been softened but not removed. Under regulation 83, where a development that has been granted an exemption starts before a valid commencement notice is received, the council must impose a surcharge of 20 per cent of the notional chargeable amount or £2,500, whichever is lower. Councils apply this without discretion, because the regulation says "must".

Where no exemption is in place, the consequences are heavier. Starting without a commencement notice can also cost you the right to pay by instalments, so the whole amount falls due at once, with interest on late payment and, in the last resort, a CIL stop notice halting the site. Failing to assume liability before work starts attracts a further fixed surcharge. And CIL liability is registered as a local land charge, so it follows the land to a buyer.

Illustrative example: a self-builder has permission for a 180 m² detached house on a garden plot in a charging zone with a residential rate of £100 per m². Before indexation that is £18,000 of liability, and indexation will push it higher. If they assume liability, claim the self-build exemption, wait for it to be granted and then serve the commencement notice, they pay nothing. If they let the groundworker start a week before the commencement notice goes in, they owe a £2,500 surcharge and keep the exemption. If they forget Form 7 Part 2 after moving in, they owe the full indexed amount. The figures are invented for the example; the sequence is not.

Finding your council's current charging schedule

Search the council website for "CIL charging schedule". Alongside it you should find the council's instalment policy and, since 2019, an annual CIL rate summary that the regulations require to be published by the end of each December showing the indexed rates for the coming year. Use the rate summary, not the original schedule, when you budget.

The Planning Portal hosts the forms, and the government's Planning Practice Guidance on the levy sets out the process in plain terms. If your project also triggers mandatory biodiversity net gain, the two regimes run in parallel and are administered separately, as the article on habitat units explains.

For a self-build application the CIL position belongs in the Planning Statement, stated in one paragraph: that the development is CIL liable, that the self-build exemption will be claimed, and that Form 1 accompanies the application. PlanScope drafts that statement from your postcode and answers, flags any site facts it cannot verify, and leaves the exemption claim for you to make on the council's forms. Enter your postcode on PlanScope to see which reports your site needs. 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.