Community Infrastructure Levy – a reminder of liability notices and their financial penalties

This article highlights the importance of ensuring that you receive a Community Infrastructure Levy (CIL) liability notice, which in turn will enable you to serve a CIL commencement notice before starting development to avoid penalty surcharges.

What is the Community Infrastructure Levy?

CIL is a charge levied by local authorities on new development which creates a net additional floor space of 100 square metres or more.

A costly reminder

An Inspector recently determined that a Community Infrastructure Levy liability notice sent by email to an applicant’s agent had been adequately served, despite the agent claiming not to have received the email (appeal reference APP/D0840/L/23/3317203).

The applicant had failed to serve a CIL commencement notice (required by Regulation 67 of the CIL Regulations 2010) and the local authority consequently imposed a surcharge for this alleged breach. The applicant appealed against this, arguing that the authority had not correctly served the CIL liability notice, but the appeal was dismissed.

For those familiar with CIL appeals, this is not at all surprising given the strict application of Regulation 67 (the need to serve a commencement notice before commencing development). However, the decision serves as a reminder for applicants that failure to comply with CIL requirements can lead to financial penalties being imposed.

Community Infrastructure Levy regulations - Liability notices

Regulation 65 of the CIL Regulations requires the collecting authority to issue a liability notice as soon as practicable after the day on which planning permission first permits development.

The liability notice must be served on the “relevant person” which is normally the person who applied for the planning permission.

Regulation 126 sets out the various ways that notices can be validly served – including via email if an email address has been given as an address for service.

In most circumstances therefore it is open for the collecting authority to serve a liability notice by emailing an applicant’s agent where that agent has provided their email address on the planning application form.

The Planning Inspector is likely to have little sympathy for a claim that an email was not received if the authority presents evidence to the contrary. In the appeal in question, the collecting authority supplied the Inspector with a copy of the email (enclosing the liability notice) together with correspondence to verify that the agent had previously successfully received emails at the address used, and this was sufficient for the liability notice to be validly served on the applicant.

Commencement notices

Regulation 67 of the CIL Regulations requires a commencement notice to be submitted prior to commencing development. A commencement notice must be submitted in writing and identify the liability notice it relates to – which is why it is important to first receive the liability notice.

Lessons to learn

The Government intends largely to replace CIL with a new Infrastructure Levy (see our article here for details). Whilst CIL remains in place, applicants should note that the Regulations are strict and there are financial consequences for non-compliance. Ultimately, applicants should take care to follow the procedure, rather than hoping to rely on an alleged fault or omission of the local authority.

Applicants should consider how they fill out their planning application form as this could form the basis for an address for service for CIL documentation. A sensible approach would be to provide multiples addresses for service to ensure any liability notice is not missed.

More importantly, applicants should be proactive. If they have not received a liability notice from their collecting authority, they should request one so that they can properly serve their commencement notice. Once a commencement notice is served, an applicant should also ensure they receive an acknowledgment of receipt from the collecting authority before commencing development – to help avoid any future dispute over a failure to serve a commencement notice.