Regulations amending the Community Infrastructure Levy ("CIL") regime come into force today (29 November 2012), following a swift passage through Parliament. The Regulations are unchanged since the draft version published in October: the amendments are brief and technical, correcting errors in formulae and confirming that CIL is not payable in full twice for the same development where there is a section 73 variation to a planning permission, and that CIL will not be charged on 'replacement permissions' where the original permission was granted before 1 October 2010 and is still extant and unimplemented. More substantial amendments to the CIL Regulations are expected in due course, to deal with other issues in the CIL regime which could be discouraging development. For now, the London Mayor has issued a useful guidance document on the interaction between Crossrail and CIL charges in London and on the implementation of CIL generally. It is possible that the Chancellor's Autumn Statement on 5 December could address the CIL regime.
The nature of the CIL (Amendment) Regulations 2012
The Department for Communities and Local Government ("DCLG") did not conduct a public consultation on these CIL (Amendment) Regulations 2012 because of their technical nature: the aim is to improve the way CIL operates and to correct unintended errors. The Regulations are published in the same form as the draft released in October and the main amendments coming into force today are summarised here (note that none of these will be retrospective):
- Section 73: removal of double charging: The Amendment Regulations correct unintended double-charging on section 73 variations to a planning permission, so that CIL will be payable only once for the same development (with a top up payment required if there is an increase in floorspace since the original permission). This amendment aims to prevent development being held back by the threat of another large CIL liability if minor material changes are made.
- Replacement Permissions (extension of time to implement) do not attract CIL: 'Replacement' planning permissions can be granted where the original permission was granted on or before 1 October 2010 and is still extant and unimplemented (under article 18(1) of the Town and Country Planning (Development Management Procedure) (England) (Amendment No 2) Order 2012). The Amendment Regulations confirm that CIL is not payable on such 'replacement' permissions.
- Development under 'neighbourhood development orders' could attract CIL: The CIL Regulations will apply to development consented under a neighbourhood development order (under s.61E of the Town and Country Planning Act 1990, as amended by the Localism Act 2011), meaning CIL is potentially payable on these.
- Formulae corrected: The Amendment Regulations correct an error in the formula in Regulation 40 so that there will be no overcharging for development involving the retention of some existing buildings and the demolition of others. The amendments also correct the formula for calculating the social housing element of a development.
DCLG is currently working with a group of advisors from the property industry and with local government to try to agree a further set of changes to the CIL regulations to address more substantial issues within the CIL regime. Hopefully these further amendments will cover such issues as double-charging for a permission which is partly implemented, where the scheme is then revised enough to require a whole fresh planning permission (this kind of CIL double-charging is likely to discourage scheme revisions).
However, given that it has taken over a year for the government to draft and enact these Amendment Regulations which correct minor technical points, there could be a significant delay before more substantial amendments appear and they are likely to require public consultation before coming into force. Several property groups have requested that DCLG suspend the CIL regime until the UK economy recovers more, but as yet nothing has been confirmed by the government. It is possible that CIL will be mentioned in the Chancellor's Autumn Statement on 5 December 2012.
The new Community Infrastructure Levy (Amendment) Regulations 2012 can be viewed here.
London Mayor's Draft Supplementary Planning Guidance on Crossrail and CIL Charges
Up to now there has been minimal guidance on the interaction between Mayoral CIL in London and Crossrail payments under section 106 obligations. The London Mayor has now published draft Supplementary Planning Guidance for public consultation until 15 January 2013 ("Use of planning obligations in the funding of Crossrail and the Mayoral Community Infrastructure Levy"). The draft SPG is intended to replace the previous Crossrail SPG (July 2010), taking into account recent developments such as the London Plan July 2011, the CIL regime, the National Planning Policy Framework and the latest Crossrail developments.
The draft SPG provides some useful general guidance on the CIL regime as well as providing clarity on the way in which section 106 obligations and CIL payments are to be used towards the funding of Crossrail and how to avoid double-charging. Some interesting new proposals include a method of paying Mayoral CIL in instalments at 60 days and 240 days after commencement of development, and calculating section 106 Crossrail contributions using gross internal area (rather than gross external area which is currently used), to be consistent with the calculation of CIL.
Further government guidance on CIL is expected and is likely to be welcomed by the property industry.
The Mayor's draft supplementary planning guidance on Crossrail and CIL can be viewed here.