Liability notice and demand notice under the levy

A liability notice tells you how much Community Infrastructure Levy a permission attracts. A demand notice tells you when to pay it. They arrive at different points, they carry different rights of challenge, and on a phased scheme you will see several of each. Developers lose money on the levy through timing far more often than through the rate itself, so the two notices deserve the same attention as a drawdown schedule.

What each notice does and when it arrives

The collecting authority issues a liability notice as soon as practicable after planning permission is granted, under regulation 65 of the Community Infrastructure Levy Regulations 2010. It sets out the chargeable amount, how that figure was reached, the payment procedure and the consequences of not paying.

The demand notice comes later. It follows the start of development, once the authority knows the date from the commencement notice, and it states the sums payable, the dates they fall due and the instalments if the authority has an instalment policy.

Both notices are registered as a local land charge, which is why they surface on searches and why an unpaid levy follows the land.

Checking a liability notice for errors

Read the calculation, not the total. The chargeable amount is the charging schedule rate for the relevant use, applied to the net chargeable floor area, indexed in accordance with the regulations.

Four things go wrong often enough to be worth a standing check:

• The gross internal area of the proposed development, measured from the drawings rather than the application form
• The deduction for existing floorspace, which depends on the building having been in lawful use for a continuous period that the regulations define, so demolition dates and occupation evidence matter
• The use attributed to each part of the scheme, where a mixed scheme straddles two rates in the charging schedule
• The indexation figure and the year applied to it

If the authority has applied relief you claimed, check it appears on the notice. If it has not, raise it in writing immediately rather than waiting for the demand, because the review deadline runs from the liability notice.

Instalment policies and payment windows

Without an instalment policy, the whole charge falls due in a single payment a set number of days after development starts. With one, the authority publishes the thresholds, the number of instalments and the timing, usually scaled by the size of the charge.

Instalment policies vary considerably between authorities and are changed from time to time, so download the current policy rather than relying on the version you used on the last site. A policy is only available if the start of development has been properly notified, and a missed commencement notice commonly removes the right to pay by instalments altogether. That is one of the sharpest cash flow consequences in the whole regime.

An illustrative example. A scheme with a £420,000 charge under a policy offering three instalments might pay a proportion at 60 days after the start, the next at 180 days and the balance at 360 days. Lose the instalment right through a missed notice and the full sum falls due on the first date, mid-groundworks. The figures are illustrative, and the real thresholds come from the authority's published policy.

Surcharges, interest and enforcement

The regulations attach surcharges to specific failures rather than to lateness generally. Failing to assume liability, failing to notify the start of development, failing to respond to an information notice and failing to pay on time each carry their own consequence, and they can stack.

Late payment also attracts interest at a rate set in the regulations by reference to the Bank of England base rate. Beyond that, the authority can serve a levy stop notice preventing further development until payment is made, recover the debt through the courts and, in the last resort, pursue the statutory enforcement routes the regulations provide. A stop notice on a site with a funded programme is a serious event, which is why the levy belongs on the risk register alongside the section 106 obligations.

Those obligations are a separate matter from the levy, and where a scheme changes the right route may be a deed of variation under section 106A rather than anything to do with these notices.

Requesting a review or appealing

The sequence is review first, appeal second. A request for a review of the chargeable amount goes to the collecting authority within the short period stated in the notice, commonly 28 days from the date of the liability notice. The authority reviews the calculation and issues a decision.

If the figure is still wrong, the appeal on the chargeable amount goes to the Valuation Office Agency, again within a short statutory window. Appeals about apportionment between landowners also go there. Appeals against surcharges, against a deemed start date determined by the authority and against a levy stop notice go to the Planning Inspectorate.

Two practical points. The deadlines are measured in days and are stated on the notice itself, so diarise them on receipt. And an appeal on the chargeable amount is about arithmetic and the application of the schedule, not about whether the charge is fair, so an appeal that argues the rate is too high will fail.

Revised notices after an amendment

A section 73 permission is a fresh planning permission, so it brings a fresh levy calculation and a revised liability notice, with credit for the earlier permission under the regulations. A section 96A non-material amendment does not create a new permission, though a change in floor area can still prompt a recalculation.

Relief decisions can also change the picture. Where a disqualifying event occurs, such as a self-build dwelling being sold within the clawback period, the authority issues a revised notice and the levy becomes payable.

When a revised notice arrives, treat it as a new document. Review and appeal rights run from it, and the figures should be checked against the drawings as approved rather than against the original submission. For anyone building their own home, the sequencing in the self-build exemption from the levy determines whether a revised notice ever appears at all.

Cash flow planning around the levy

Treat the levy as a programmed cost with two trigger dates: the date you notify the start of works and the date each instalment falls due.

1. Model the charge from the charging schedule before you submit, using measured gross internal areas and the existing floorspace deduction you can actually evidence.
2. Check the authority's instalment policy and build the dates into the development appraisal.
3. Serve the assumption of liability notice and any relief claim before anything happens on site.
4. Serve the commencement notice and keep proof of service, because the instalment right depends on it.
5. Reconcile the demand notice against your own model within days of receiving it.

And keep the evidence of lawful existing use. On a conversion or redevelopment, the deduction for existing floorspace is frequently the largest single variable in the calculation, and the authority will ask for proof of continuous lawful use rather than taking the applicant's word for it.

You can see which reports your scheme is likely to need and draft the supporting statements for your own review before submission.

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