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Community Infrastructure Levy and Rural Developments

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Shruti Trivedi, Head of Planning at Roythornes recently delivered a planning update on the application of the Community Infrastructure Levy Regulations 2010 (as amended) (the Regulations). This prompted some interesting questions with regards to rural developments and the application of the Community Infrastructure Levy (CIL), in particular how the levy applies to agricultural buildings.  In this latest blog, I consider some of the points raised and the implications of the Regulations in this context.

CIL is a fixed levy charge on new buildings above a certain size that local planning authorities may choose to set.  It is designed to contribute towards the cost of local infrastructure requirements in order to mitigate the impact of development.  Development will potentially be liable for CIL if it is for a building into which people normally go and involves a new build of at least 100m2 gross internal area floorspace.

Q: If I want to convert some outbuildings into a single residential dwelling, will CIL apply?

A: As a general rule, CIL is not chargeable if:

  • no additional floorspace is created by the conversion of a building into a new dwelling, and
  • that building has been in continuous lawful use for six months out of the three years before development is permitted. 

However, caution needs to be exercised as, if the proposed conversion includes an extension to the original building, CIL is chargeable on the increase in floorspace created by that extension.  CIL will also be chargeable on the entirety of the existing floorspace of the building if it cannot be proved that the building has been in continuous lawful use for six months out of the three years before development is permitted.  If you intend to live in the conversion yourself, you may qualify for the self-build exemption (see my comments below). Such considerations can become very technical and I recommend that you seek specialist advice if in doubt. 

Q: If I want to build my own home on my land will CIL be chargeable?

A: The first step is to check if the local authority for the area within which the land is situated has adopted a CIL Charging Schedule.  If a Charging Schedule is in force, then CIL will be applicable if the development of a new dwelling involves the creation of new floorspace of at least 100m2 gross internal area. However, where you intend to live in the dwelling yourself, the Regulations contain an exemption for self-built dwellings which applies to anybody building their own home, provided that certain criteria are met.  In order for this exemption to apply, individuals must:

  • own the property;
  • occupy it as their sole or main residence for a minimum of three years after the work is completed; and
  • submit an application to apply the exemption to the charging authority prior to commencing any development. 

The charging authority will register a local land charge against the property for a period of three years from completion of the construction works.  If, during the three-year period, any of the following events occur, CIL will become payable in full:

  • any change in relation to the self-build housing such that it ceases to meet the criteria set out in Regulations;
  • failure to comply with the evidence requirements on completion;
  • the letting out of a whole dwelling or building that is self-build housing; or
  • the sale of the self-build housing.

If any of the disqualifying events listed above occur, you must notify the charging authority in writing within 14 days. Where this is not done, a surcharge equal to 20% of the chargeable amount or £2,500, whichever is the lesser, may be applied in addition to the CIL amount.

Q: If I build a grain store or similar type of agricultural building on my land will this be liable to CIL?

A: The position is not so clear cut when it comes to agricultural buildings and the application of CIL.  The starting point is that, in most instances, where agricultural buildings are constructed on land in an area in which a CIL Charging Schedule has been adopted by the local authority, if the building will create new floorspace of at least 100m2 gross internal area, it will therefore be considered to be chargeable development liable to a CIL charge. However, not all local authorities have yet adopted CIL and, of those that have, some have opted to either apply a zero or reduced rate charge to agricultural development.  Unfortunately, this is not the case in all areas and we are aware of local authorities charging a standard rate for agricultural development which can have serious implications for the viability of the scheme.

There are a number of exemptions in the Regulations; these may assist developments in areas where a Charging Schedule has been adopted that applies a standard or reduced rate charge to agricultural developments. Regulation 55 provides for relief to be granted in exceptional circumstances; this relief is discretionary and is dependent on whether or not the relevant charging authority has decided to offer discretionary relief.   Regulation 6(2) provides an exemption in respect of buildings into which people do not normally go.  A recent CIL appeal decision published on the Planning Inspectorate CIL appeal decision web page highlights the difficulties in attempting to apply this exemption to agricultural buildings.

The appeal related to the development of two agricultural buildings to house cattle, store agricultural machinery and animal feed.  The owner tried to argue that the development fell outside the scope of the CIL Regulations as the sheds were not buildings into which people would normally go and the buildings therefore fell within the exemption contained in Regulation 6(2).  This argument was rejected by the inspector appointed to determine the appeal, who was of the view that the sheds would certainly be entered daily for the purpose of feeding and checking the livestock and to move machinery and feed.  In addition, it was considered that the exemption in Regulation 6 paragraph (2)(b) (which provides an exemption for buildings into which people go intermittently for the purpose of inspecting or maintaining plant and machinery) did not apply in this case as the buildings did not contain any fixed plant or machinery.  It was therefore ordered that the CIL was correct and payable.

A copy of the appeal decision can be found using the following link:

It is worth highlighting, if you are considering such operations, that it may be worthwhile talking to us on strategy to see if we can make suggestions as to (potential) CIL liability but even more so, in engaging with us before CIL Charging Schedules are actually adopted by local authorities to ensure it's not too late! We can assist in making representations in response to consultations on draft CIL Charging Schedules to seek to obtain a zero rating for agricultural development, or at least seek a far more palatable levy rate.  

If you have clients who are concerned, or if you own or rent land, or run a business which is likely to be affected by CIL, our experienced planning team can offer advice on your options.