Levy abatement on a section 73 permission explained

A section 73 permission is a new planning permission, so it creates a new chargeable development for Community Infrastructure Levy purposes and a new liability notice follows. Abatement is the mechanism that stops you paying twice for the same floorspace. Regulation 128A of the Community Infrastructure Levy Regulations 2010 requires the collecting authority to credit the amount payable under the earlier permission against the amount calculated for the varied one, so the net liability reflects only the change.

That sounds straightforward. It is not, because three things happen at once: the chargeable amount is recalculated from scratch, the index figure and rates are taken from the earlier permission rather than from the date of the variation, and every relief and exemption claimed on the original permission has to be claimed again. Developers lose money on the third of those more often than on the first two.

Why a variation creates a new chargeable amount

Section 73 of the Town and Country Planning Act 1990 allows an application to vary or remove conditions, and the grant is a fresh permission sitting alongside the original. The original is not superseded. Both exist, and the developer chooses which to implement.

For the levy that means the varied permission has to be assessed in its own right. The authority runs the Schedule 1 calculation over the varied scheme, applying the rates in the charging schedule, the gross internal area of the chargeable development and any deduction for existing buildings.

So you receive a liability notice for the varied permission showing a figure that may look alarming. Read it alongside the abatement rather than in isolation.

How abatement prevents paying twice

Abatement operates as a credit. The authority calculates the chargeable amount for the section 73 permission, then deducts the amount that was payable under the earlier permission, and the balance is what falls due.

The credit depends on the earlier permission's liability being properly in place. Where liability was never assumed, or the earlier permission has lapsed, the position is different and the authority may treat the varied permission as a standalone chargeable development. Check the status of the original before you apply.

Which permission the calculation runs from

This is the detail that catches people. Regulation 128A directs the calculation back to the earlier permission, so the charging schedule rates and the index figure applicable to the original grant are used rather than those current at the date of the section 73 decision.

The practical consequence is helpful. A permission granted several years ago, varied today, is not exposed to the full effect of index movement or a higher charging schedule adopted in the meantime. For long-running sites that is worth a lot of money.

The regulations have been amended repeatedly since 2010, and the indexation basis itself changed when the levy moved to an index published for the purpose. Check the current wording of regulation 128A and the index figure that applies, because quoting a figure from an older guidance note is how disputes start.

Index figures on a varied permission

Set the arithmetic out in a schedule and send it to the collecting authority with the application rather than waiting for the liability notice. A short table showing the original chargeable amount, the index figure used, the varied floorspace, the deduction for in-use buildings and the resulting net figure saves weeks.

Note the in-use building deduction, because floorspace changes often turn on it. A building can be deducted from the chargeable area where it has been in lawful use for a continuous period of at least six months within the three years before the development is permitted. A long-vacant building fails that test, which is why demolition timing on a stalled site matters so much to the levy outcome.

Where the viability case for the varied scheme is in play at the same time, keep the two workstreams aligned. A Viability Assessment that assumes a levy figure different from the one in the liability notice undermines itself, and councils usually expect a suitably qualified author with professional review for that document.

Where floorspace increases

The simple case. Levy is payable on the additional gross internal area at the rates and index applicable to the original permission, with abatement covering the rest.

Three points to watch. Additional floorspace in a different use may attract a different rate under the charging schedule, so a varied scheme that converts a car park into commercial space can cross into a higher band. Mezzanines count where they are gross internal area. And an increase that takes the scheme over a local affordable housing threshold brings policy requirements as well as levy, which is a separate conversation with the planning officer.

Where affordable housing provision changes with the variation, the Affordable Housing Statement has to be updated to match, and the section 106 obligations need to bind the new permission. The note on making the original section 106 bind a section 73 permission covers the deed of variation point that catches developers out at the same stage.

Where floorspace decreases

A reduction produces a lower recalculated amount, and the authority should issue a revised liability notice reflecting it. Whether money already paid comes back is a different question from whether the liability falls.

Raise it in writing early, setting out the dates of payment, the demand notices received and the recalculated figure, and ask the authority to confirm its position in the same letter. Collecting authorities vary in how they handle overpayments on varied permissions, and an early written exchange is better evidence than a phone call six months later.

Reliefs are the other trap on a reduction. Self-build exemption, residential annexe and extension exemption, social housing relief and charitable relief all attach to a specific permission. Claim them again on the section 73 permission, and claim them before development begins on that permission, because a late claim cannot be rescued.

Reconciling the liability notices

You will end up holding several notices for one site. Keep a single schedule with the permission reference, the date of grant, the chargeable amount, the index figure, the reliefs claimed and the payment dates.

1. Confirm the original permission's status and whether liability was assumed
2. Submit the additional information form with the section 73 application
3. Check the new liability notice against your own calculation, line by line
4. Serve a fresh assumption of liability for the permission you intend to implement
5. Claim any relief and receive the decision before starting work
6. Serve the notice of the start of development for the permission you implement, not the other one

Step six sounds trivial and is not. Serving that notice against the wrong permission reference is a common error, and the consequence is a surcharge for failing to notify. Where a surcharge has already landed, the grounds and the clock are set out in appealing a CIL charge.

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.