Community infrastructure levy on prior approval schemes

Community infrastructure levy liability on permitted development catches people because there is no planning application to attach it to. A scheme built under the General Permitted Development Order still creates chargeable floorspace, and the collecting authority still expects to be paid. The difference is that nobody sends you a liability notice unless you tell them the development is happening, and the mechanism for telling them is a notice of chargeable development.

Miss that step, start on site, and you lose every exemption and relief you might have claimed, permanently.

When liability arises without a planning application

The levy is charged on development that creates 100 square metres or more of new gross internal floorspace, or that creates one or more new dwellings of any size. The minor development exemption covers anything below that, provided no new dwelling is created.

Both limbs catch permitted development routinely. A barn converted to three dwellings under the agricultural to residential right creates three dwellings. A commercial building converted to flats under the commercial to residential right creates dwellings and usually a great deal of floorspace. A large agricultural building erected under the agricultural permitted development rights can exceed 100 square metres on its own.

Whether anything is actually payable depends on the charging schedule in force for that authority and the rate applying to that use and that zone, and on the reliefs described below. Liability and payment are separate questions, and the procedure has to be followed even where the eventual charge is nil.

The notice of chargeable development

Where development proceeds under a general consent rather than a planning permission, the person who intends to start must serve a notice of chargeable development on the collecting authority before development starts.

The notice describes the development, states the gross internal area created, identifies any existing buildings and their floorspace, and provides the information the authority needs to calculate the charge. Authorities publish a standard form for it, and the national forms for the levy are available through the Planning Portal.

Once the notice is served, the authority issues a liability notice setting out the chargeable amount. The chain then runs as it would for a permission: assumption of liability, any claim for relief or exemption, a commencement notice, and then payment in accordance with the instalment policy.

The timing point is the one that matters. For development under a general consent, the levy treats permission as first permitting the development on the day the development is started. That compresses the sequence, because everything that has to happen before commencement really does have to happen before the first spade goes in.

Who serves it and when

The duty sits with the person who intends to start the development, which in practice means the landowner or the developer rather than the contractor.

Serve it early. The authority needs time to issue the liability notice, and you need the liability notice before you can assume liability and claim relief. Two to four weeks before the intended start is sensible, and longer where a self-build exemption is involved because the evidence takes time to assemble.

Serving it does not commit you to building. A notice of chargeable development followed by a decision not to proceed leaves nothing to pay, because the charge crystallises on commencement.

Where a prior approval application is being made in any case, the two processes run in parallel rather than one triggering the other. Prior approval deals with the specified planning matters only, and the way that procedure works is set out in how the prior approval procedure actually works.

Existing floorspace relief and the in-use test

This is where conversions either become affordable or do not.

The calculation deducts the gross internal area of existing buildings that are to be demolished or retained and put to the same use, but only where the building qualifies as an in-use building. The test is that 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 development is first permitted.

For permitted development, with permission treated as first permitting on the day of commencement, that three year window runs back from the start date. A building that has stood empty for four years does not qualify, and the whole of its floorspace counts as new for levy purposes even though nothing is being added.

The evidence needed is documentary and specific. Business rates records, utility bills showing consumption rather than standing charges, tenancy agreements, payroll or delivery records. Photographs help but rarely carry the point alone.

This is the sharpest difference between the levy and the prior approval route itself, because several permitted development rights require a period of vacancy while the levy relief requires recent use. Read both sets of conditions together before committing to a programme. The conditions attached to agricultural conversions in particular are worth checking against Class Q barn conversions and the amendments.

Self-build and residential extension exemptions

Three exemptions matter on small schemes, and all three are lost by starting early.

A self-build exemption is available where the applicant will build or commission a dwelling and occupy it as their sole or main residence for at least three years after completion. It is claimed in two parts, the second part submitted after completion with evidence, and the exemption can be withdrawn if a disqualifying event occurs during the clawback period.

A residential extension exemption covers an extension of 100 square metres or more to an existing dwelling where the extension does not create a new dwelling. A residential annex exemption covers an annex within the curtilage of a main dwelling.

Each has the same procedural requirement. Assume liability, claim the exemption, and receive the authority's decision, all before serving a commencement notice and before starting work. The order is not negotiable and authorities apply it strictly, because the regulations give them very little discretion.

Consequences of starting before assuming liability

The penalties are mechanical rather than discretionary.

Commencing without submitting a commencement notice means the authority can disapply any instalment policy, so the full amount becomes payable immediately. Exemptions and reliefs that had not been granted before commencement are lost and cannot be claimed retrospectively. Surcharges apply for failure to assume liability, failure to submit a commencement notice and failure to comply with an information notice. The authority can also serve a stop notice in relation to the levy, and enforcement powers extend to recovery through the courts.

There is no appeal on the merits against the charge itself, although there are limited rights to request a review of the chargeable amount calculation and to appeal on specified grounds. Those routes have short deadlines measured in days, so read the liability notice on the day it arrives.

A conversion that looked viable can stop being viable on these grounds alone, which is why the levy position belongs in the appraisal rather than in the construction phase.

Records to keep for the charging authority

Keep a file that lets you reconstruct the position three years later.

• The notice of chargeable development as served, with the date and method of service.
• The liability notice and any revised liability notices.
• The assumption of liability and any transfer or withdrawal.
• Exemption or relief claims and the authority's decisions.
• The commencement notice with proof of service before the start date.
• The floorspace calculation with the measured gross internal areas and the drawings they were taken from.
• The in-use evidence for any existing building relief claimed.
• Payment records against the instalment schedule.

Gross internal area is measured to a defined convention, and a disagreement about the measurement basis is the most common dispute on a conversion. Record which convention was used and by whom.

Where a supporting statement is prepared for the prior approval or a related application, the levy position is worth summarising in it so that the file holds one coherent account, and a planning statement is the natural place for that. Enter a postcode on PlanScope to see which reports a conversion scheme is likely to need.

Levy rates are set locally and indexed annually, so check the charging authority's current schedule rather than a figure quoted anywhere else.

This is general guidance rather than legal advice. Check the position with your local planning authority or a qualified professional before relying on it.