On 14 December 2017 the draft Community Infrastructure Levy (Amendment) Regulation 2018 (the 2018 Regulations) were published.
The 2018 Regulations amend Regulation 128A of the Community Infrastructure Levy Regulations 2010 (CIL Regulations) which applies to applications to vary planning permissions granted before a CIL charging schedule was in force.
The 2018 Regulations propose an amended formula for calculating the adjustment to be applied to CIL liability in respect of applications falling within Regulation 128A.
Rates of CIL in charging schedules are indexed annually to the BCIS All-In Tender Price index. There has been some confusion about the CIL rates and indexation that apply in the circumstances above. Some charging authorities have sought to apply a formula to calculate CIL liability that is based on the indexation at the time of the original permission, leading to significantly inflated CIL liability.
This was highlighted in the appeal heard by the Valuation Office Agency relating to the St John's Hill development in Clapham. The tribunal valuer in the appeal concluded that when calculating CIL payments in respect of an amendment to an existing application, CIL liability should be calculated based on indexation at the time of the amended application not the original permission. The 2018 Regulations will (assuming they are not changed) confirm that the appropriate indexation figure to be used is the index figure for the relevant section 73 application with a like for like comparison to be made to determine the adjustment to the CIL liability.
The explanatory note accompanying the 2018 Regulations explains that to assess the additional CIL incurred as a result of any change introduced by a section 73 permission the charging authority should "compare the CIL charge for the section 73 development to the hypothetical CIL charge that the original planning permission would have been subject to. The CIL liability is the difference between the two figures". The 2018 Regulations will therefore provide clarity, and give effect to the approach many believed to be the intention of the CIL Regulations, that the levy is only charged for the additional liability introduced through the section 73 permission.
Although this amendment to the CIL Regulations will not affect a significant number of permissions it is a welcome clarification for developers, particularly in respect of large scale developments and should avoid disputes, such as those in the relation to the St John's Hill development, arising in the future.