Section 73 permissions and CIL recalculation
Varying a condition creates a new permission, a new liability notice and a new set of exemption claims. Where the levy is abated, and where it is lost.
A section 73 CIL recalculation catches out more schemes than any other part of the levy, because the instinct is wrong. Varying a condition feels like an administrative tidy-up. For levy purposes it creates a fresh planning permission, a fresh chargeable development, a fresh liability notice and a fresh set of exemption claims. Miss the last of those and a self-build exemption worth more than the variation disappears.
The good news is that the Community Infrastructure Levy Regulations 2010 contain machinery to stop you paying twice. Regulation 128A deals specifically with permissions granted under section 73, and it repays reading in the current consolidated version rather than in a note written before the 2019 amendments.
Why a varied permission is a new permission
Section 73 of the Town and Country Planning Act 1990 allows an application for planning permission to develop land without complying with a condition attached to an earlier permission. If granted, the result is a new permission in its own right, sitting alongside the original, which remains extant until it lapses or is implemented.
Two consequences follow for the levy. The new permission is capable of being a chargeable development, so the collecting authority has to issue a liability notice for it. And the developer has a choice of which permission to implement, because both exist, which means the levy position is only fixed once the start-of-works notice identifies one of them.
So the sequencing question is not "what do we owe" but "which permission are we building out, and have we served the right notices for that one".
How the chargeable amount is recalculated
The chargeable amount for the section 73 permission is calculated in the ordinary way under Part 5 of the 2010 Regulations: chargeable floorspace by rate, with indexation, less any retained or demolished floorspace that qualifies for deduction.
The part that differs is indexation. Regulation 128A provides for the section 73 permission to be calculated by reference to the index figure applying when the earlier permission was granted rather than the current one, so a variation does not trigger a full re-indexation of the whole scheme. On a permission granted several years ago, that difference alone can run to a large sum, and collecting authorities do sometimes get it wrong by defaulting to the current index.
Retained floorspace deductions are recalculated too. If buildings that were in lawful use at the date of the earlier permission have since been demolished, the position on whether their floorspace can still be deducted turns on the in-use test at the relevant date, which is why demolishing early is sometimes expensive.
| Change made by the section 73 permission | Usual levy effect |
|---|---|
| Condition wording only, no floorspace change | Recalculated amount, offset by the earlier liability, net nil |
| Internal layout change, same gross internal area | Net nil, but a new liability notice still issues |
| Additional floorspace | Levy on the additional floorspace only |
| Reduced floorspace | No refund where the earlier amount has been paid, subject to the regulations |
| Change of use affecting rate bands | Recalculated at the applicable rates for each use |
| New permission implemented instead of the original | The levy follows the permission actually built out |
Check the table against your own charging schedule, because differential rates by use and by zone complicate the arithmetic in ways a general table cannot capture.
Credit for amounts already paid
The abatement mechanism in regulation 128A is what prevents double charging. In outline, the amount payable under the section 73 permission is reduced by the amount that was payable under the earlier permission, so the developer pays on the increase and nothing more.
The mechanism depends on the earlier liability having been properly established. Where no liability notice was ever issued for the original permission, or where the original was granted before the charging schedule took effect, there may be nothing to abate against, and the section 73 permission can carry a charge the original never did. That is a real risk on long running sites where a charging schedule has been adopted in the interval.
Where the levy has already been paid in full and the variation reduces floorspace, do not expect money back. The regulations are not designed to refund, and a reduction in scheme size after payment is generally a loss. Our note on discharging a section 106 obligation that no longer serves covers the parallel point for obligations.
Where a variation increases floorspace
This is the most common commercial scenario: a section 73 to enlarge units, add a storey to a block, or convert previously unlettable space into accommodation.
An illustrative example. A permission for 40 flats is varied to 40 flats with a larger communal core and three enlarged units, adding 180 square metres of chargeable floorspace. The authority recalculates the whole scheme, applies the index figure from the date of the original permission, deducts the earlier chargeable amount, and issues a liability notice for the balance. The developer's exposure is the levy on 180 square metres, not on the whole block. This example is illustrative and your charging schedule rates will differ.
Where the extra floorspace pushes the scheme past a policy threshold, the levy is the smaller of your problems. Crossing 10 units brings affordable housing policy into play and may require an Affordable Housing Statement, and crossing a viability threshold may mean a Viability Assessment prepared to the RICS professional standard, a report type where councils expect a suitably qualified author.
Timing of notices on the new permission
The sequence is unforgiving and the penalties are automatic.
- The collecting authority issues a liability notice for the section 73 permission. Chase it if it does not arrive, because its absence does not remove liability.
- Whoever intends to pay serves an assumption of liability notice, in the prescribed form, before development starts.
- Any exemption or relief is claimed, and determined, before development starts.
- The notice required by regulation 67 is served, identifying the permission being implemented, before any material operation.
- The authority issues a demand notice setting out instalments under its published instalment policy.
Failure to serve that notice before starting removes the benefit of the instalment policy and can trigger a surcharge, with the whole amount becoming payable immediately. On a section 73 permission the risk is higher than usual, because work has often already begun under the original permission and nobody thinks of the variation as a start of development.
Treat the first material operation after the grant of the section 73 permission as the trigger and serve that notice beforehand, even if the site is already active.
Effect on an exemption already claimed
Self-build exemption, residential annex and extension exemption, and social housing relief are all granted in relation to a specific permission. They do not carry across to a section 73 permission automatically.
The practical rule is to re-claim on the new permission and to get the claim determined before any material operation under it. For self-build, the clawback period and the obligation to submit the required evidence after completion also attach to the permission claimed against, so the paperwork trail has to follow the permission you actually build out.
This is where the money is lost. A self-builder who varies a condition on a materially active site, does not re-claim, and continues working has a full levy liability on a dwelling that was exempt the week before. Our guide to affordable housing review mechanisms in section 106 sets out the forms and the order they go in.
Checking the authority's arithmetic
Collecting authorities make four recurring errors on section 73 recalculations, and all four are worth checking line by line.
- Applying the current index figure instead of the figure for the year the earlier permission was granted.
- Failing to abate the earlier chargeable amount, so the whole scheme is charged again.
- Omitting retained or demolished floorspace that still qualifies for deduction.
- Applying the wrong rate band where the variation changes the mix of uses.
Ask for the calculation in writing with each input shown. The regulations provide a review and appeal route on the chargeable amount, with short deadlines running from the liability notice, so check the figures the week they arrive rather than the month before the first instalment.
And keep a single schedule of permissions, liability notices, assumption notices, exemption claims and regulation 67 notices for the site. On a scheme with three variations, that schedule is the document that stops an avoidable surcharge.
PlanScope can draft the planning statement and supporting narrative that accompanies a section 73 application, structured to the policy tests and with gaps flagged for your team to complete.
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.
Frequently asked questions
Does a section 73 permission create a new CIL liability?
Yes. The varied permission is a new planning permission and capable of being a chargeable development, so the collecting authority issues a fresh liability notice for it. Regulation 128A of the Community Infrastructure Levy Regulations 2010 then abates the amount by reference to the earlier permission, so in practice you pay on any increase rather than on the whole scheme again.
Which index figure applies to a section 73 recalculation?
Regulation 128A provides for the calculation to use the index figure applying when the earlier permission was granted, rather than the figure current at the date of the variation. On an older permission that difference can be substantial, and collecting authorities sometimes default to the current index, so check the inputs in writing.
Do I have to re-claim a self-build exemption on a section 73 permission?
Yes, and before any material operation under the new permission. Exemptions and reliefs attach to a specific permission and do not carry across. The common and expensive mistake is varying a condition on an already active site, continuing work, and only later discovering that the exemption was never claimed against the permission being built out.
Will I get a refund if the variation reduces floorspace?
Generally no. The regulations are built to prevent double charging rather than to refund, so a reduction in scheme size after the levy has been paid is usually a loss. If the reduction is substantial and payment has not yet fallen due, raise it with the collecting authority before the demand notice issues rather than afterwards.
What if the original permission predates the charging schedule?
Then there may be no earlier chargeable amount to abate against, and the section 73 permission can carry a charge the original never did. This arises on long running sites where a charging schedule has been adopted in the interval. Model that exposure before applying, because in some cases implementing the original permission is the better commercial answer.
Sources and further reading
This article is general guidance about the planning system in England and, where stated, the rest of the UK. It is not legal or professional advice. Check your local planning authority’s validation requirements and take professional advice for your specific site.