Reading a CIL liability notice and paying on time

A CIL liability notice is the collecting authority telling you what the Community Infrastructure Levy on your permission will be and how the payment process works. It arrives after permission is granted and it is not a demand for payment. What it does is start a sequence of forms and deadlines under the Community Infrastructure Levy Regulations 2010, and almost all the money that self-builders and small developers lose to the levy is lost by missing one of them rather than by the charging rate itself.

The unforgiving step is the notice you have to give before work starts. Miss it and you lose the right to pay by instalments, you can lose an exemption you had already been granted, and you pick up a surcharge.

What the liability notice tells you

Read it for five things.

The chargeable amount, expressed as a total. The description and reference of the permission it relates to. The chargeable development, meaning which floorspace has been counted. The payment procedure, including whether the authority operates an instalment policy. And the deadline for requesting a review if you think the calculation is wrong.

Check the permission reference first. Where a scheme has been through a section 73 variation, a fresh liability notice is issued for the new permission, and the two notices can sit on the file looking very similar with different amounts.

The notice is not a bill. No money is due until development starts and a demand notice follows. That gap is where people relax, and it is exactly the wrong moment to do so.

Somebody has to assume liability

Liability for the levy has to be assumed by a person or a company, using the assumption of liability form, before development starts.

If nobody assumes it, liability falls on the owner of the land. For a self-builder that may be the same person anyway, but on a plot held in one name and built out by a company it matters, and on a site being sold with permission it matters a great deal.

Assume liability early and in the right name. Transferring it later is possible through a further form, and it is cleaner to get it right at the outset. There is a surcharge for failing to assume liability where it should have been assumed.

For a self-build, assume liability in the name of the person who will occupy the dwelling, because the self-build exemption is personal to the occupier and the paperwork needs to be consistent.

The notice that must arrive before work starts

The commencement notice tells the collecting authority the date development will begin. It must reach the authority before that date, and the regulations are strict about it.

The consequences of not submitting it are three, and they compound.

Any instalment policy falls away, so the whole chargeable amount becomes payable in a single sum shortly after the deemed start date rather than in stages.

A surcharge applies. The regulations set it at 20 per cent of the chargeable amount or £2,500, whichever is the lower figure.

An exemption or relief already granted can be lost, because starting work without the required notice is treated as a disqualifying event for some reliefs. This is the one that ruins self-build projects.

What counts as starting is broader than most people assume. Material operations, which can include site clearance, demolition, laying out a road or digging a trench for foundations, are capable of amounting to commencement. A contractor who brings a machine on site to strip topsoil a week before you meant to start has started the development.

So submit the commencement notice with a comfortable margin, in writing, and keep proof of when it was sent. An email acknowledgement from the CIL officer is worth having.

Demand notices, instalments and due dates

Once the authority knows development has begun, it issues a demand notice stating the amount payable and the dates it is due.

Where the authority has no instalment policy, or where you lost the benefit of one, the default position under the regulations is payment in full within 60 days of the start of development. Sixty days is not long if the money was going to come from a construction drawdown that has not landed yet.

Where an instalment policy applies, the notice will set out the stages. Policies vary considerably between authorities, keyed to the size of the charge and the length of the build, so read the one that applies rather than assuming a pattern.

Indexation catches people out too. Charging schedules are indexed, so the amount on the demand notice can be higher than the figure discussed at application stage if time has passed. That is a reason to check the arithmetic rather than a reason to dispute it.

Put every date from the demand notice into the project programme alongside the construction milestones. The levy competes for cash with the same drawdowns as everything else, and the other consent costs, including highway works under separate agreements as set out in section 278 and section 38 costs on a small scheme, land in the same period.

Surcharges and interest

The regulations attach surcharges to specific procedural failures, not to the development itself. The recurring ones are failure to assume liability, failure to submit a commencement notice, failure to respond to an information notice and late payment.

Late payment attracts both a surcharge and interest. The surcharge is a percentage of the overdue amount subject to a minimum figure, and it escalates where the amount remains unpaid at six months and again at twelve. Interest accrues at a rate set by reference to the Bank of England base rate plus a margin. Take the current figures from the regulations rather than from a summary, because they have been amended.

There is an appeal route against surcharges, and it is time limited. Where a surcharge has been imposed because a form went astray, gather the evidence of what was sent and when, and appeal promptly rather than negotiating informally until the deadline passes.

Checking the calculation before you pay

The chargeable amount is the charging rate multiplied by the net chargeable floorspace, adjusted for indexation. Two inputs are worth checking on every notice.

The floorspace measurement. The levy is charged on gross internal area, which includes internal walls, circulation, plant space and integral garages. Measurement errors are common on conversions and on schemes with complicated roof spaces.

The deduction for existing buildings. Where a building on the site has been in lawful use for a qualifying period before permission was granted, its floorspace can be deducted from the chargeable area. The regulations require the building to have been in continuous lawful use for at least six months within the three years ending on the day the permission first permits development. Evidence of that use, such as utility bills, council tax or business rates records, is what secures the deduction, and an authority will not apply it on assertion alone.

If the figure looks wrong, request a review from the collecting authority within the deadline stated on the liability notice, which the regulations set at 28 days from its issue. If the review does not resolve it, there is a further appeal on the chargeable amount to the valuation authority, again within a limited period.

Do not simply pay a figure you think is wrong and argue afterwards. The review route is short and it closes.

Self-build and extension exemptions

The exemptions that matter most to individuals are self-build housing, residential annexes and residential extensions.

For self-build, the process has two halves. Claim the exemption before development starts and receive confirmation that it has been granted. Then, within the period the regulations allow after completion, submit the supporting evidence, which includes proof of title, evidence of occupation as your sole or main residence, the approved plans and a completion certificate.

Both halves are mandatory. A claim granted and then unsupported after completion is withdrawn, and the full charge becomes payable. Selling the property within the clawback period also triggers repayment.

Extensions below the regulations' floorspace threshold are outside the levy as minor development. Above it, an exemption has to be claimed rather than assumed, and the claim has to be in before work starts.

The common failure on all of these is sequencing. Claim, wait for the grant, submit the commencement notice, then start. In that order, every time.

Before you reach any of this, the application itself has to be validated and determined, and the cost of failing validation and resubmitting is the expense that precedes the levy. To scope the supporting documents a permission will need, the index of report types by category sets out what each covers, and PlanScope pricing shows what drafting one costs.

This is general guidance, not legal advice. Check the current regulations and 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.