Levy payment or a section 106 contribution for the same works

When a council asks for cil or section 106 contribution money towards the same road junction, the two requests are governed by different rules and only one of them is negotiable. The Community Infrastructure Levy is a formula applied to floorspace, set out in a published charging schedule, and it is not open to argument on the merits. A planning obligation has to pass the three tests in regulation 122 of the Community Infrastructure Levy Regulations 2010, and if it fails any of them the authority cannot lawfully take it into account in granting permission.

That asymmetry is the whole of the practical answer.

What the levy funds and what it cannot

The levy is a charge on net additional floorspace, spent on infrastructure to support development across the charging authority's area. It is deliberately broad and deliberately unlinked to the site that pays it, which is why a scheme in one town can fund a school in another.

Affordable housing sits outside it. The levy cannot be spent on affordable housing, so affordable housing is always delivered through a planning obligation, on every site, however high the levy rate. Any conversation that treats the two as alternatives on affordable housing has gone wrong at the first step. Where viability is in issue, the case is made through a Viability Assessment and the outcome is recorded in an Affordable Housing Statement, not through the levy.

A proportion of levy receipts is passed to the parish or town council, and a further slice is retained for administration. The rest goes into the charging authority's infrastructure spending, which is why the question of what the levy has actually funded matters when you are resisting a site-specific request for the same item.

The three tests an obligation has to pass

Regulation 122 is short and worth knowing verbatim in substance. A planning obligation may only be a reason for granting permission where it is:

1. Necessary to make the development acceptable in planning terms.
2. Directly related to the development.
3. Fairly and reasonably related in scale and kind to the development.

Those tests are statutory, not policy, so they are not a matter of the authority's discretion. Necessity is the sharpest of the three. An obligation that funds something the authority would like rather than something without which the development would be unacceptable fails, and a request framed as a standard tariff for a category of infrastructure often fails on the same ground.

Scale and kind is where most negotiation happens in practice. A 40 unit scheme asked to fund a whole junction upgrade serving a wider growth area has an argument on proportionality even where the junction work is necessary in principle.

Where both can lawfully be sought

Both can be sought on the same development, and frequently are. What is not permitted is using both to pay for the same item of infrastructure in a way that amounts to double charging.

The clean division in most authorities is that the levy funds strategic and cumulative infrastructure while obligations fund site-specific mitigation and affordable housing. So a levy payment plus an obligation to build the site access, provide on-site open space and fund travel plan monitoring is normal. A levy payment plus a contribution to the same secondary school expansion the levy is funding is the request to push back on.

What replaced infrastructure lists and pooling limits

This is where advice written before September 2019 goes wrong. The regulation 123 list, which named the infrastructure the levy would fund and barred obligations for anything on it, was abolished. So was the pooling restriction that limited an authority to five obligations towards any one infrastructure project or type.

Those safeguards were replaced by transparency rather than prohibition. Charging authorities must publish an infrastructure funding statement annually, reporting what they received in levy and obligations, what they spent it on and what remains committed. Regulation 122 still applies to every obligation, and the statement is now the evidence base for arguing that a particular item is already funded from the levy.

Practically, that means asking for the latest infrastructure funding statement as a first step in any negotiation, and reading what the authority says it intends the levy to deliver. An authority that has published an intention to fund a category of infrastructure from the levy has made your argument for you if it then seeks an obligation for the same thing.

Relief, exemptions and instalments

Levy relief and exemptions are procedurally unforgiving, and the procedure defeats more claims than the substance does.

Self-build exemption, residential annexe and extension exemption, social housing relief and charitable relief all exist. Development of less than 100 square metres of new build can be exempt where it does not create a dwelling. Each has its own form, its own evidence and its own deadline, and in every case the exemption has to be claimed and granted before development starts.

Miss the sequence and the exemption is lost. Assume liability, claim the relief, receive the decision, then submit the commencement notice, then start. Starting before the notice is submitted removes any instalment entitlement and triggers a surcharge, and the amount becomes payable in full immediately. Illustrative example: a self-builder who claimed the exemption correctly but sent the commencement notice three days after the groundworkers arrived lost the exemption entirely and faced the full charge plus a surcharge. The exemption was valid. The sequence was not.

Instalment policies are set by each charging authority and published alongside the charging schedule. There is no national instalment entitlement, so check the local policy before modelling cash flow.

Indexation and payment triggers

Levy rates in a charging schedule are stated in pounds per square metre at a base date and then indexed annually, so the figure you pay is not the figure in the schedule. The index used for the calculation is published annually, and the rate applied depends on the year in which permission was granted.

The sequence of notices runs: liability notice issued by the collecting authority after permission, assumption of liability by whoever will pay, commencement notice before development starts, then a demand notice setting out the amount and the payment dates. Each stage has consequences if missed. Because the numbers are indexed and the notices are procedural, a levy bill is worth checking arithmetically rather than accepting, and the regulations provide a route to request a review of the calculation and then to appeal it.

Challenging a request for both

If an authority seeks an obligation for something you believe the levy already covers, the argument runs in this order. Ask what the obligation is necessary for, and press for the planning reason rather than a policy reference. Ask for the evidence that it is directly related to the development. Ask for the infrastructure funding statement and identify whether the same item appears as levy-funded. Then set out in writing why the request fails regulation 122, and propose the obligation you accept is justified.

Committee reports have to explain how each obligation meets the three tests, so a request that cannot be explained that way rarely survives being asked about. Where the authority holds its position, the choice is to accept, to refuse and appeal, or to complete the agreement with a reduced sum and reserve the point. Appeals on regulation 122 grounds do succeed, and inspectors are willing to find that an obligation fails the tests and to disregard it.

None of this reduces the levy itself. The levy is arithmetic, and the only routes are relief, exemption, the in-use building deduction and correcting an error in the calculation. Understanding which regime a request comes from is therefore the first thing to establish, because it decides whether there is anything to negotiate at all. Where the case is about affordable housing viability rather than infrastructure, the difference between a viability assessment and an affordable housing statement is a separate question worth settling.

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

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