Levy abatement for existing lawful floorspace

Community infrastructure levy is charged on net additional floorspace, so existing floorspace on the site can be deducted from the chargeable amount. The deduction is not automatic. Regulation 40 of the Community Infrastructure Levy Regulations 2010 only allows floorspace in an in-use building to be offset, and a building is in use for this purpose only if a 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 planning permission first permits the chargeable development. Fail that test and you pay the levy on the whole of the new floorspace, including the part that replaces a building you have just knocked down.

The amounts involved are large enough that the evidence of occupation is worth assembling before the application goes in, not after a demand notice arrives.

How abatement reduces the chargeable amount

The levy calculation takes the gross internal area of the chargeable development, deducts qualifying existing floorspace, applies the charging authority's rate for the relevant use, and indexes the result. The deduction covers floorspace in an in-use building that is to be demolished, and retained parts of such a building, measured on the same basis as the new floorspace.

Measure consistently. Gross internal area is the measurement convention, and a floor area taken off an old set of drawings at a different convention will not match the new scheme. Where the figures are contested, the difference is almost always a measurement convention rather than a dispute about walls.

The practical effect on a conversion or redevelopment can be the whole liability. A scheme replacing a 900 m² occupied building with 1,100 m² of new floorspace pays on the net addition where the test is met, and on the full 1,100 m² where it is not. That is the figure to put in front of a client before they agree to demolish anything.

The in-use building test

Three elements have to line up, and each is a place where authorities refuse the offset.

The use must be lawful. A building in unauthorised use, or in a use that has never had permission and has not become lawful through the passage of time, does not qualify however long it has been occupied.

The use must have run for a continuous period of at least six months. Six separate months across the three years is not the same as six continuous months, and a building emptied and re-let repeatedly can fail on continuity alone.

The period must sit within the three years ending on the day planning permission first permits the chargeable development. That date is not the date of the application, and on an outline permission with reserved matters it may be considerably later, which can work in either direction.

Evidence of lawful use and occupation

Charging authorities want documents, not assertions. Build the file as you would for a lawful development certificate.

• Business rates records showing the rateable occupier and the period
• Utility bills with consumption, not just standing charges
• Tenancy agreements, licences and rent demands with payment records
• VAT returns or trading accounts referable to the premises
• Employee records, payroll addresses or delivery records
• Dated photographs of the interior in use, and signage
• The planning history establishing that the use was lawful

The weakest evidence is a statutory declaration with nothing behind it. The strongest is rates records plus metered consumption, because the two together show both liability and actual occupation. Where the building was partly occupied, say which part and for how long, since the test is satisfied by a part of the building being in use rather than the whole.

Floorspace that cannot be offset

Several categories sit outside the deduction and are worth checking before relying on a number.

The structures point catches industrial sites. Silos, tanks, plant enclosures and open sided canopies often make up a large share of a site's apparent floorspace and contribute nothing to the deduction, so an early measured survey that separates qualifying from non-qualifying area avoids a nasty revision to the appraisal.

Buildings demolished before the application

This is the expensive mistake. The deduction works from a building situated on the land on the day planning permission first permits the chargeable development, so demolishing under an earlier consent, or clearing a site to make it more marketable, can forfeit the offset entirely.

The sequence that protects the position is to obtain the permission that will carry the levy liability first, then demolish. Where demolition has to happen earlier for safety or practical reasons, take advice on the current regulation before instructing the contractor, and record the floor areas, the occupation evidence and the condition of the building before it goes.

The same logic applies to vacancy. A building left empty while a scheme is designed can slide out of the three year window, and the longer the design programme runs the greater the risk. Keeping a building in genuine lawful occupation during that period, through a short term letting or a meanwhile use, protects the deduction as well as generating income. The valuation consequences of that are a separate question, covered in meanwhile use and its effect on benchmark land value.

Recording the position on the forms

The existing floorspace claim is made on the additional information form submitted with the planning application. Complete it properly rather than leaving it to be sorted out later, because the charging authority calculates the liability from what the form says.

1. Submit the additional information form with the application, with the existing floorspace stated and the use identified
2. Attach the occupation evidence rather than offering to supply it on request
3. Assume liability in writing before development starts, using the assumption of liability form
4. Serve the notice of the start of works before anything begins on site, because missing it loses instalment rights and triggers a surcharge
5. Check the liability notice when it arrives, against your own calculation

If the liability notice is wrong, there is a formal route. A request for review of the chargeable amount goes to the charging authority within the prescribed period, and an appeal on the chargeable amount then lies to the Valuation Office Agency. Both have short deadlines, so diary them when the notice arrives.

Where authorities refuse the offset

The common refusals are predictable. Insufficient evidence of occupation. A use that was lawful in fact but never authorised in planning terms. A gap in occupation that breaks continuity. A building demolished before the relevant date. And floorspace that was never gross internal area in the first place.

Two of those are curable by better record keeping and one by better sequencing, which is why the levy position belongs in the appraisal at acquisition rather than at the point of submission. A viability assessment that assumes an offset the evidence will not support is a viability assessment that will be unpicked.

Browse the report types to see which documents a redevelopment scheme is likely to need alongside the levy paperwork.

This is general guidance, not legal advice. Check the position with your charging 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.