Mayoral levy relief and exemptions in London

A London development pays the levy twice. Mayoral CIL relief is claimed from the same borough that collects the borough's own charge, under the same national rules in the Community Infrastructure Levy Regulations 2010, but the two charges are calculated separately against two different charging schedules. So a scheme that is wholly relieved from the borough charge can still carry a Mayoral liability, and the claim forms have to be filed for each.

Get the sequence wrong and relief is lost outright. That is the part to read twice.

How the Mayoral charge sits alongside borough charges

The Mayor of London is a charging authority in his own right, and the current Mayoral charging schedule funds the Elizabeth line. Its rates are set by band, with the central boroughs paying more than outer London, and separate rates applying to office, retail and hotel floorspace in the central area and the Isle of Dogs. Rates are indexed annually, so take the figures from the current published schedule rather than from any article.

The borough is the collecting authority for both charges. It issues the liability notice, which should show the Mayoral and borough amounts separately, and it collects and passes on the Mayoral element.

Two practical consequences. First, your levy budget is the sum of two schedules, and on a central London scheme the Mayoral element is not a rounding error. Second, because one authority administers both, a single procedural failure can affect relief against both charges.

Which reliefs are available

The reliefs come from the national regulations rather than from the Mayoral schedule, so the same categories apply:

• Social housing relief, which is mandatory for qualifying affordable housing and discretionary in a wider form where the charging authority has adopted it
• Charitable relief, for development to be used wholly or mainly for charitable purposes by the charity owning the land
• The self-build exemption for a dwelling built by or for an individual who will occupy it as their sole or main residence
• The residential annexe and extension exemptions, with extensions below the stated floorspace threshold treated as minor development
• Discretionary relief in exceptional circumstances, available only where the charging authority has adopted it and where a section 106 agreement exists

That last relief is rare and heavily conditioned. Both charging authorities would need to have adopted it for both charges to be relieved, which is why it is seldom a workable answer to a viability problem in London.

Vacant building credit is not relief. It reduces the chargeable area by offsetting existing floorspace that has been in lawful use, and it operates through the levy calculation rather than through a claim.

Social housing relief and its conditions

Social housing relief is the one that moves the numbers on most London schemes, because affordable housing is often a third or more of the floorspace. It applies to qualifying dwellings, broadly those let by a provider at social or affordable rent and certain shared ownership and intermediate products, with the detail set out in the regulations.

The claim has to be made and granted before development starts. It then carries a clawback period, during which a disqualifying event, such as a relieved dwelling being sold into the open market, makes the relieved amount payable.

Two drafting points save money later. Describe the tenure precisely in the claim and match it to the section 106 definitions, because a mismatch invites a challenge at the point of sale or refinancing. And where the affordable mix may change through a review mechanism, flag it in the claim, since a tenure switch from rented to intermediate can alter the relief position. An Affordable Housing Statement that uses the same tenure labels throughout the application pack is worth the editing time.

Self-build exemption in a London context

The self-build exemption applies in London on the same terms as everywhere else, and it is used far more often than people expect, on single infill plots, backland plots and conversions of garages and outbuildings into a dwelling for the owner's own occupation.

The conditions are strict. The applicant has to assume liability, claim the exemption and have it granted before starting, then occupy the dwelling as their sole or main residence for three years, with supporting evidence filed after completion. Selling or letting within that period triggers repayment.

The failure that recurs is procedural rather than substantive. Someone starts work before the claim is granted, or starts without serving the required notice, and the whole exemption falls away along with any discretion to put it right. Authorities have limited scope to accept a late notice, and the regulations have been amended more than once in this area, so check the current position before relying on anything you read about it.

Claiming before you start work

The order of events is fixed and unforgiving:

1. Submit an assumption of liability notice naming whoever will pay.
2. Submit the relief or exemption claim, with the evidence the form requires.
3. Wait for the authority to grant it in writing.
4. Submit a notice telling the authority the date development will start, at least the day before.
5. Start work.

Material site operations, including demolition and in some cases site clearance, can amount to the start of development. A contractor turning up early has cost more than one scheme its exemption.

Keep the paper trail. Dated photographs, the contractor's instruction and the notices with their submission receipts are what you will need if the authority later asserts that work began before relief was granted.

Clawback where conditions are breached

Each relief carries its own clawback. Social housing relief is repayable on a disqualifying event within the stated period. The self-build exemption is repayable if the occupation condition is broken within three years or the evidence is not supplied. Charitable relief is repayable if the charitable use ceases within the clawback period.

Surcharges apply on top for failures such as not assuming liability, not serving a start notice or not paying on time, and late payment interest runs from the due date. Those surcharges are set in the regulations and they are not small on a large scheme.

Where a scheme is amended under section 73, the levy is recalculated against the chargeable amount for the new permission, and relief has to be claimed again on the new liability. Do not assume a previous grant carries across.

Budgeting for both charges

Build the levy into the appraisal as two lines, each taken from the current schedule and indexed, with the relieved floorspace shown separately. Then add the section 106 obligations, which are negotiated separately and which the Mayor also has an interest in on referable schemes.

Where the numbers do not work, the answer is usually a viability case rather than a relief claim, which is a different exercise with its own evidence requirements. A Viability Assessment prepared to the recognised standards is the document that carries that argument. Our notes on what an opportunity area allocation changes and on Article 4 directions over office to residential conversions cover two London-specific factors that often sit behind the same appraisal.

This is general guidance, not legal advice. Check the position with the collecting authority or a qualified professional before relying on it, and take the rates from the current charging schedules.

See PlanScope pricing if you want to draft the supporting documents for a London scheme yourself rather than commissioning each one.

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