CIL and Affordable Housing Contributions
Mole Valley District Council (MVDC) introduced the Community Infrastructure Levy (CIL) on 1st January 2017. If your planning application includes additional housing, an element of on-site affordable housing, or contributions to off-site affordable housing provision, may also be required.
What is CIL?
The Community Infrastructure Levy (CIL) is a charge that local authorities can set on new developments. Its purpose is to raise funds for infrastructure needs in the area to support growth. The infrastructure list - Regulation 123 List, (see 'Downloads') details the types of infrastructure that CIL will be used to help fund.
In the majority of cases, CIL replaces the existing Section 106 (S106) agreements, which the planning system previously used. However, S106 agreements continue to operate alongside CIL for certain developments such as the Council's Affordable Housing Supplementary Planning Document.
Mole Valley District Council's (MVDC) approved charging schedule (see 'Downloads') took effect on 1st January 2017. The document sets out the types of development that are liable for CIL and the rates at which it will be charged. All planning applications granted after this date are liable to pay a CIL charge.
What is a CIL liable development?
The charging schedule includes charges for both retail and residential uses. A development is likely to be CIL liable if:
- The increase in floor area is 100sqm or more for retail and residential development, not including new dwellings.
- New dwellings
- The conversion/change of use of a building(s) to CIL liable development, and where the building has not been used lawfully for a continuous period of at least six months in the last three years
Development commenced under 'general consent' is liable to pay CIL, as well as developments that require Planning Permission. 'General Consent' includes permitted development rights granted under The Town and Country Planning (General Permitted Development) (England) Order 2015 (See 'Internet Links').
If a development comes under general consent, a Notice of Chargeable Development Form 5: Notice of Chargeable Development must be submitted to the local planning authority prior to the commencement of works. Examples of CIL can be found in the 'Downloads' section below.
What do I need to do?
- Submit the Planning Application - Additional Information Requirements Form with your planning application for validation. This form ensures the Council has sufficient information to determine whether the development is liable and the charges associated are accurately calculated.
- Submit Form 1: Assumption of Liability detailing the party responsible for paying the CIL charge. The Council would strongly encourage this form to be submitted at the beginning of the application process to ensure that there is no delay on any relief that may be applicable. If liability has not been assumed prior to commencement, then the liability will automatically transfer to the landowner, and relief will be lost.
- If the development meets the criteria for CIL exemption or relief, you will need to submit either Form 2, Form 7 part 1, Form 7 part 2, Form 8 or Form 9 as appropriate (see links to forms below).
- Once planning permission has been granted and commencement intended, complete and return Form 6: Commencement Notice. If the development commences prior to submitting this notice, then relief will not be applicable, surcharges will be applied, and instalments will not be offered. For the definition of commencement, please refer to Town and Country Planning Act 1990 - Definition of Commencement (see 'Internet Links').
- When all the relevant forms have been completed and returned, MVDC will issue a CIL Liability Notice. The notice sets out the charge due and details of the payment procedure. At this stage a charge will be placed upon the land. Once the CIL liability has been paid in full, then the charge will be removed.
A CIL Process flowchart can be found in the 'Downloads' section below.
How much will I have to pay?
The amount of CIL payable (the chargeable amount) will be calculated in accordance with the Community Infrastructure Levy Regulation 2010 (as amended). The chargeable amount will equal the net additional area created (measured using the gross internal floorspace), and can depend on the type and location of the development. The chargeable amount may be modified according to exemption, relief and defaults of commencement. For further information, please refer to the CIL Charging Schedule (see 'Downloads').
How do I pay CIL?
For most small schemes, CIL charges are expected to be paid within 60 days from commencement. MVDC has adopted an instalments policy for larger schemes where CIL liability can be phased:
|Chargeable Amount||Amount Payable from Commencement|
|Up to £50,000||One payment within 60 days|
|£50,001 - £250,000||Two equal payments within 90 and 180 days|
|£250,001 - £1 million||Three equal payments within 90, 180 and 270 days|
|Over £1 million||Phasing preferred. Alternatively, three equal payments within 90, 180 and 270 days|
Payment can be made by BACS or cheque. When making payment, the payment reference number on the Demand Notice must be quoted so that the remittance can be linked to the correct application.
Surcharges and Interest
If the liable party/parties fail to submit the necessary forms, notify MVDC of changes, comply with the terms of the notices, or make late payments, surcharges will be applied and instalments will not be offered. Surcharges range from £50 - £2,500, and are set out in Regulations 80-86 of the CIL Regulations 2010 (as amended). (See 'Downloads').
If an applicant persistently fails to comply with MVDC, a CIL Stop Notice can be issued. This notice prohibits ANY further development on site until the CIL payment is made in full. Failure to comply with a stop notice can lead to a fine of up to £20,000. MVDC also has the power to apply to the Magistrates Court allowing them to seize and sell all assets of the liable party, and in a small number of cases the liable person could be sent to prison for up to three months. Therefore, if you feel that enforcement action is not warranted, or you think it may have been taken in error, please contact the MVDC as soon as possible.
Right of Appeal
There are a number of specific circumstances whereby applicants and liable parties can appeal the decision of the Council in relation to CIL. All appeals must be made by the applicant or liable party within the relevant timescales set out in the CIL regulations 2010 (as amended).
If development has already commenced before you receive the notification from the Council, the appeal review will lapse and the original amount will become due for payment as set out in the original Demand Notice.
If MVDC's decision is not satisfactory, a further appeal can be made through the Valuations Office Agency (see 'Internet Links').
IMPORTANT - It is an offence for a person who knowingly or recklessly supplies information which is false or misleading in a material respect to a charging authority in response to a requirement under the CIL Regulations 2010 (as amended).
Further information about CIL can be located on the Planning Portal.
Forms and guidance for submission with a planning application:
- Planning Application - Additional Information Requirements Form
- Planning Application - Additional Information Requirements Guidance
- Form 1: Assumption of Liability
- Form 2: Claiming Exemption or Relief
- Form 3: Withdrawal of Assumption of Liability
- Form 4: Transfer of Assumed Liability
- Form 5: Notice of Chargeable Development
- Form 6: Commencement Notice
- Form 7: Self Build Exemption Claim Form Part 1
- Form 7: Self Build Exemption Claim Form Part 2
- Form 8: Self Build Residential Annex Exemption Claim Form
- Form 9: Self Build Residential Extension Exemption Claim Form
If you have any further queries relating to CIL, please email CIL@molevalley.gov.uk or call 01306 879392.
Guidance as to when on-site affordable housing, or a financial contribution towards affordable housing, is required is contained in the 'Affordable Housing SPD Addendum - Thresholds and Vacant Building Credit' (see 'Downloads'). This guidance incorporates changes to the use of planning obligations originally introduced by a Written Ministerial Statement in November 2014, and reinstated following an Appeal Court Judgement in May 2016.
If you believe that your development is exempt from providing affordable housing contributions because it is less than 1000sqm gross floor space, please provide details of the external floor area with the application.
Details of how to calculate contributions for affordable housing are set out in 'Affordable Housing SPD - updated January 2018' (see 'Downloads'). A vacant building credit can be used to offset affordable housing contributions where a vacant building is brought back into use, or is demolished to be replaced by a new building. Details of how to calculate a vacant building credit are set out in 'Affordable Housing SPD Addendum - Thresholds and Vacant Building Credit' (see 'Downloads').
Applications for development requiring affordable housing must be accompanied by a Unilateral Undertaking (Section 106 undertaking) as a means of securing it. A section 106 template is available (see 'Downloads').
When submitting a Section 106 undertaking, you must also submit office copy entries and a filed plan (obtainable from the Land Registry) relating to the registered title to the application site.
MVDC charge to check submitted standard Section 106 undertakings relating to affordable housing contributions. A separate fee, based on the hourly rate of the legal officer dealing with the matter and the amount of time spent on it, is charged for preparing or checking non-standard Section 106 undertakings.