In late July, the Government published draft regulations on CIL and a further consultation paper. Many in the property industry have been assuming “it will never happen”, but it now seems likely that the regulations will be in force in 2010 and there are clear signs that local authorities will be forced to adopt CIL if they are to maintain (with opportunities to increase) current levels of receipts from development.

CIL will operate as a tax on certain types of development. In essence, only development in relation to buildings is caught but this will include changes of use. If CIL is adopted in a particular area, then chargeable development in that area will attract CIL which will be calculated on a gross internal floor space basis. There may be more than a single rate of CIL in any given area because charging authorities may set differential rates for different uses and/or different parts of the area. There is an exemption for charities.

In the health sector, clients could find themselves liable to pay CIL for their development, but at the same time there are opportunities to influence the way CIL is set up in any particular area with the aim of securing some contributions for a wider range of health infrastructure than is currently the case.

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