How a Community Infrastructure Levy charge is calculated

A Community Infrastructure Levy charge is arithmetic, not judgement, which is why it is worth checking rather than accepting. The calculation multiplies the charging schedule rate for the relevant use and zone by the net chargeable floorspace, then adjusts the result for inflation using index figures for two particular years. Get any of those three inputs wrong and the liability notice is wrong.

The input that is wrong most often is the deduction for existing floorspace, because it turns on a test about how the building was used rather than on whether the building exists. A building that has stood empty for years may bring no deduction at all.

Net chargeable floorspace and how it is measured

Floorspace is measured as gross internal area, so it includes internal walls, circulation, stores, plant rooms inside the envelope and any mezzanine. Measured externally or to net lettable area, the figure will be wrong.

The chargeable figure is new floorspace less any deduction the regulations allow for existing floorspace. That gives the net area the rate is applied to.

Common measurement disputes:

• Mezzanines and galleries, which count where they are within the building envelope
• Basements and undercrofts, which count where they are enclosed
• Covered but open structures such as a canopy or car barn, which usually do not
• Integral garages, which count, unlike a detached garage in many cases
• Plant enclosures on a roof, depending on whether they are enclosed

Where the number matters, get an area schedule prepared from the submitted drawings, room by room, and keep it. A liability notice is easier to challenge with a measured schedule than with an assertion.

The charging schedule rate for the use and zone

Rates are set locally by the charging authority, expressed in pounds per square metre, and they vary by development type and by geographical zone. Two sites in the same borough can carry very different rates, and the zone boundaries are drawn on a map that forms part of the schedule.

Read the schedule itself rather than a summary table. Check which use category your scheme falls into, whether the authority has separate rates for different residential products, and whether any category carries a nil rate. Where a scheme is mixed use, each element is charged at its own rate on its own floorspace.

Then check the date the schedule took effect, because that date feeds the indexation calculation. Our note on reading council charging schedules, zones and indexation goes through the document itself in more detail.

Indexation and which index year applies

The regulations uprate the charge using an index, and the fraction that does it uses two different years: the index figure for the year in which planning permission was granted, divided by the index figure for the year in which the charging schedule took effect.

So an old charging schedule with a low headline rate can produce a larger charge than the rate suggests, because the gap between the two index years is wider. Conversely, a recently adopted schedule produces little or no uplift. Check which index the regulations require and the figures for both years, since the index used has changed over time.

Existing floorspace deductions and the in-use test

Here is where most errors sit. Existing floorspace can be deducted from the chargeable area, but only where the building satisfies the in-use test: lawful use for a continuous period of at least six months within the three years before development is permitted.

Three consequences follow.

A building that has been vacant throughout the last three years brings no deduction, however large it is. A building used unlawfully brings no deduction, because the use must be lawful. And the six months must be continuous within the window, so a pattern of short lettings may not qualify.

Evidence is therefore worth assembling early: tenancy agreements, business rates records, utility accounts, delivery records, photographs with dates, staff records. Gather it while the building is still in use rather than after it has closed, because reconstructing occupation two years later is far harder than documenting it at the time.

Retained floorspace that will remain in the completed development is treated separately from demolished floorspace, and both need identifying clearly on the drawings.

Demolition and what can be offset

Floorspace to be demolished can count towards the deduction where it meets the in-use test. The practical question is sequencing.

Demolishing early, before permission, is a common and expensive mistake on a levy-liable site. Once the building is gone the occupation history is harder to evidence, and if demolition happens long before permission the six month period may fall outside the three year window altogether. Where a site has a levy liability and a building that is still in use, take advice on timing before the site is cleared.

Keep a measured record of what was demolished, prepared before the machines arrive, with drawings and photographs. It is the only evidence you will have.

The liability notice and how to check it

The charging authority issues a liability notice after permission, setting out the chargeable amount and who is liable. Read it against your own calculation line by line.

1. Check the rate quoted against the charging schedule for the correct use and zone
2. Check the net area against your own measured schedule, and identify how the authority arrived at its figure
3. Check whether the deduction you expected for existing floorspace has been applied, and if not, whether the in-use test is the reason
4. Check the two index years used, and that the schedule effective date is right
5. Confirm who is recorded as liable, and whether an assumption of liability has been submitted
6. Diary the procedural steps, particularly the commencement notice

That last point carries the sharpest penalty in the whole regime. Exemptions and reliefs, including the self-build exemption and the residential extension exemption, have to be claimed and approved before development starts, and a commencement notice has to be submitted before work begins. Missing either can remove the relief entirely and trigger surcharges, whatever the merits. Where a scheme is phased, each phase has its own sequence, which is the point made in our note on how planning costs recur when a scheme is phased.

Appealing a calculation you think is wrong

There is a defined route, and it is time limited. Start by requesting a review by the charging authority of the chargeable amount. If the review does not resolve it, an appeal on the chargeable amount goes to the Valuation Office Agency, and appeals about surcharges and other procedural matters go to an appointed person through the Planning Inspectorate.

Two practical points. The grounds are that the calculation is wrong under the regulations, not that the charge is unaffordable. And deadlines are short and strict, so the review request has to be made promptly after the liability notice arrives rather than after a conversation with the officer that drifts for a month.

As an illustrative example, a scheme replacing a 400 square metre workshop with flats might expect a deduction for the whole workshop. If the workshop's last tenancy ended three and a half years before permission, the in-use test is not met, the deduction disappears, and the liability rises by the rate multiplied by 400 and then indexed. Nothing about the building changed. Only the dates did.

Note also that the Levelling-up and Regeneration Act 2023 contains powers for a different levy, and those powers have not replaced the existing regime, so check the current position before assuming any change applies.

For the documents an application of this kind needs, see the 66 report types by category, and drafting costs are set out on the pricing page.

This is general guidance, not legal advice; check the position with your local planning authority, the charging authority or a qualified professional before relying on it. Rates and index figures change, so take the current published schedule. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.