A recent decision by the Planning Inspectorate has found that the onus is on developers to ensure that a CIL Commencement Notice has been received by the Collecting Authority.
The CIL Regulations (Regulation 67(1) of the Community Infrastructure Levy Regulations 2010) provide that a commencement notice must be submitted to the Collecting Authority no later than the day before the day on which the chargeable development is to be commenced.
In this case, the appellant stated that a commencement notice was submitted a month before starting work on the development. However, the Collecting Authority had no record of receiving the notice.
The Inspector stated that it is the developer’s ultimate responsibility to ensure the commencement notice is received by the Collecting Authority in good time. The liability notice makes clear the possible consequences of failing to serve the notice in time. The prescribed form for the commencement notice can be seen here. Given the importance of the timely service of the commencement notice and the fact that the developer could face a surcharge, the Inspector found that it was not unreasonable to expect a developer to contact the Collecting Authority before starting works to check that the commencement notice had been received.
In this case the Inspector took the view that pressing ahead with the development without checking that the commencement notice had been received was a risky strategy. While there is no obligation for documents to be submitted by Recorded Delivery, the result of choosing not to means that there is no proof of postage which ultimately will put the developer at risk.
Alternatively, a developer may choose to serve the commencement notice on the Charging Authority by hand. This will mitigate the risk provided that a valid receipt of service is obtained.
Developers should be aware that if chargeable development is commenced before the Collecting Authority has received a valid commencement notice; the Collecting Authority may impose a surcharge equal to 20% of the CIL chargeable in respect of the development or £2,500, whichever lower.
Additionally, the developer’s right to pay the CIL liability in instalments (which may apply depending on the level of CIL due) is only available where the Collecting Authority has received a valid commencement notice and the CIL liability has been properly assumed prior to commencement.
If a valid commencement notice is not served prior to commencement, the Collecting Authority can demand payment of all of the relevant CIL liability prior to commencement in addition to the surcharge referred to above in addition to interest if the CIL payment is not paid when due. This could have significant and unexpected cash flow implications on the developer and should be avoided.
Please click here for the full appeal decision.