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CIL FAQs Page 3
- Deciding on whether to develop a charging schedule
- Preparation and evidence for developing a charging schedule
- Evidence on infrastructure
- Evidence on viability
- Setting a CIL Rate - differential rates
- Setting a CIL Rate – For new local authority areas (e.g.National parks, new unitaries etc)
- Updating the charging schedule
- Collecting CIL
- Spending CIL: infrastructure list (Regulation 123 list)
- Spending CIL: general questions
- Spending CIL: infrastructure delivery
- CIL, s106 Obligations (Planning Act) and Section 278 (Highways Act)
- Non CIL development: pooling s106
- Payment of CIL
- CIL reliefs and exemptions
- CIL related policies
- Finance questions
- Localism Act-financial considerations
CIL, s106 Obligations (Planning Act) and Section 278 (Highways Act)
Can a charging authority fund an infrastructure project through both Section 278 and CIL?
Yes. The limitations on pooling planning obligations (Reg. 123) do not apply to section 278 agreements. They apply to section 106 agreements. Authorities can combine both s278 and CIL monies to fund improvements to the strategic road network.
Can infrastructure improvement be funded by section 106 money from one council and CIL receipts from another council?
Yes. Just be aware that if you are planning to use section 106 money to fund the improvement and you have a CIL in place, make sure that you have not stated in your infrastructure list that you will be funding this improvement via CIL.
If a development has either a zero rate, is exempt, or receives full relief from CIL - can I ask for section 106 contributions towards infrastructure?
No. The limitations on planning obligations apply irrespective of whether a development is charged CIL or not. The key trigger is whether the development consists of buildings people normally go into. If it does then the limitations on Section 106 obligations apply.
When I introduce CIL will I still be able to pool up to five contributions for one infrastructure project?
Yes, for an item of infrastructure that is not intended to be funded by the levy. The limit of five applies as well to types of general infrastructure contributions, such as education and transport. In assessing whether five separate planning obligations have already been entered into for a specific infrastructure project or a type of infrastructure, local planning authorities must look back to all agreements that have been entered into since 6 April 2010 and check that there is no more than five in total.
After I have pooled up to 5 contributions towards one project can I then put that project on my Reg. 123 list to collect CIL for it?
What is year zero? I have heard it being referred to in relation to s 106 and CIL.
Year zero is the date local planning authorities must go back to when assessing whether five separate planning obligations have already been entered into for a specific infrastructure project or a type of infrastructure. Year zero is April 2010.
Non CIL development: pooling s106
Can we still pool s106 obligations for mitigation under the habitat regulations after we introduce a CIL or after the 6th April 2014?
Do these obligations include contributions for infrastructure to support development? If so you will only be able to pool contributions from up to five separate planning obligations for such item if it is not locally intended to be funded by the levy.
For provision that is not capable of being funded by the levy, those items that are not considered to be infrastructure to support development, local planning authorities are not restricted in terms of the numbers of obligations that may be pooled, but they must have regard to the wider policies set out in Circular 5/05 and legal tests in the CIL Regulations (Reg. 122).
We have a policy that seeks s106 obligations towards training and apprenticeships Can we continue to pool these obligations after we introduce a CIL or 6th April 2014?
Do these contributions provide infrastructure to support development? E.g. training centres if so, you will only be able to pool contributions from up to five separate planning obligations if it is not locally intended to be funded by the levy.
Contributions for anything that is not considered to be infrastructure, local planning authorities are not restricted in terms of the numbers of obligations that may be pooled, but they must have regard to the wider policies set out in Circular 5/05 and legal tests in the CIL Regulations (Reg. 122).
Payment of CIL
What is the most appropriate way to collect and enforce CIL?
It is up to the collecting authority. Some finance departments may already have the skills and systems needed to collect CIL and account for receipts and reporting. Or it maybe the same team that collects/monitors/enforces S106 payments.
Should we get new software to collect CIL?
Up to you. Look at other systems already in place for collection and enforcement, such as planning obligations, council tax and business rates, to see what you can learn or even adapt these systems for CIL. A number of the software suppliers are currently working on providing a CIL product.
Can a charging authority's instalment policy have different payment deadlines for different uses or types of development?
There is flexibility to vary the payment deadlines only by the size of the CIL payment i.e. it can extend the CIL payment deadline if the payment is larger. It cannot vary the payment by the use and type of development.
Is the local authority's instalment policy part of its charging schedule?
No. It isn’t part of the CIL examination. You can introduce, withdraw or amend an instalments policy at any time during the life of their charging schedule as long as you give at least 28 days notice before the new policy takes effect and/or old policy is withdrawn.
Can a charging authority give developers a CIL payment holiday?
No. The only way to provide development with a 'payment holiday' would be to cease charging CIL. However, if the authority wished to subsequently start charging CIL again they would need to follow the same process as they originally applied to the preparation, examination, approval and publication of the initial schedule, as specified under sections 211 to 214 of the Act and Part 3 of the CIL regulations.
CIL reliefs and exemptions
When, and how, can I give reliefs or exemptions?
There are two specific instances for giving relief from the levy. First, a charity landowner gets full relief from their portion of the liability where the chargeable development will be used wholly, or mainly, for charitable purposes. Secondly, social housing gets 100% relief.
You can offer discretionary relief to a charity landowner where the greater part of the chargeable development will be held as an investment, from which the profits are applied for charitable purposes. The charging authority must publish its policy for giving relief in such circumstances.
You can also give relief from the levy in exceptional circumstances where a specific scheme cannot afford to pay the levy. A charging authority wishing to offer exceptional circumstances relief in its area must first give notice publicly of its intention to do so. A charging authority can then consider claims for relief on chargeable developments from landowners on a case by case basis. In each case, an independent person with suitable qualifications and experience must be appointed by the claimant with the agreement of the charging authority to assess whether:
- the cost of complying with the signed section 106 agreement is greater than the levy’s charge on the development and
- paying the full CIL charge would have an unacceptable impact on the development’s economic viability.
If the independent person finds that the scheme cannot bare the s106 and the CIL charge it can recommend a level of relief that will bring the scheme into viability. It is then up to you to decide whether or not to give all or part of that relief.
You also need to consider whether the level of relief you may intend to offer does or does not constitute a notifiable state aid.
You cannot just negotiate away CIL or decide not to charge it. In the case of development where the level of s106 is not higher than the levy, the owner must pay the entire levy.
What happens if a collecting authority grants social housing relief on a portion of that development, but then the developer subsequently turns some of the units into private market housing?
To ensure that any form of relief from the levy is not used to avoid proper liability for the levy, the regulations require that any relief must be repaid, a process known as ‘clawback’, if the development no longer qualifies for the relief granted within a period of seven years from commencement of the chargeable development.
There are some regeneration sites that cannot bear the level of charge that has been set – will I be able to negotiate the charge down or not charge in these cases?
CIL has safeguards and checks to ensure that the rates in a charging schedule are affordable. In an exceptional circumstance where a CIL charge renders a scheme unviable you could offer exceptional circumstances relief (see above)
Does the exceptional circumstances procedure just involve an open-book viability assessment of development by the local authority?
No. An independent person with suitable experience and qualifications must be appointed by the developer with the agreement of the charging authority to assess whether the value of the section 106 Agreement exceeds the CIL liability on the site and, secondly, whether the CIL liability is having an unacceptable impact on the viability of the development. If this is found to be the case and the charging authority wishes to offer sufficient relief to bring the development back into viability, the charging authority must also ensure that the granting of the relief would not constitute a notifiable state aid.
Can a charging authority grant exceptional circumstances before the development has planning permission?
No. One of the conditions for offering relief is that a section 106 Agreement has already been entered into.
CIL related policies
If I have decided to put a CIL in place what CIL related policy decisions do I have to make and should I publicise them?
You will need to decide whether to:
- announce that you will allow exceptional circumstances
- publish an instalments policy and
- publish a discretionary charitable relief policy.
These policies are separate to the formal charging schedule.
When do the charging authorities need to make these decisions?
Charging authorities have the option to introduce, amend or withdraw these policies at any time during the life of the charging schedule. However, the authority must give at least 28 days notice before a new instalments policy and at least 14 days notice for before a new exemption and discretionary charitable relief policy takes effect and/or old policy is withdrawn.
Can the local authority borrow on the strength of getting future CIL revenue to pay for a piece of infrastructure early?
No. The local authority cannot currently borrow against future CIL receipts.
I understand that the interest charged on late payments goes into CIL monies but are there any rules about the use of the interest collected from holding CIL?
There are no rules about how the interest collect from CIL should be spent.
Localism Act-financial considerations
Are the financial incentives is still a material consideration in the Localism Act?
Yes, the Act does make clear that financial considerations may be material. However, this does not alter the legal position, just make it more explicit. It has always been the case legally that anything which was material should be a consideration, whether it be a financial or any other matter