The High Court decision in Shropshire Council v Secretary of State for the Communities and Local Government  EWHC 16 (Admin) confirms that the Community Infrastructure Levy Regulations 2010 (the “CIL Regulations”) will be interpreted strictly. All notices must be given precisely in the form set out in the CIL Regulations and, if they are not, severe financial penalties may be incurred.
Mr Jones, a self-builder, obtained planning permission to build a detached house in Shropshire. The CIL liability was assessed at £36,861.43. He expected to benefit from the “Self-build” CIL exemption. He informed the Council’s planning department in an email that works would begin on 11 July 2015.
On 13 August 2015, the Council issued a demand notice for £39,361.43 on the basis that development had commenced without a Commencement Notice being served pursuant to the CIL Regulations. The amount included the full amount of CIL and a surcharge for failing to serve the notice.
Mr Jones successfully appealed the notice. The Inspector agreed that his email to the planning team did constitute a CIL Commencement Notice. The Council challenged the Inspector's decision.
The Court found in favour of the Council. It stated that the CIL Regulations outline a prescribed statutory procedure. It confirmed that all procedural requirements must be adhered to. Applying the ordinary interpretation of the words, a notice that does not comply with timing or content required under statute will not be a notice under that statute. Mr Jones' email failed to meet the requirements of Regulation 67. Therefore, his commencement notice was held to be invalid; he lost the ability to claim the “self build exemption” and he was required to pay the full CIL bill and surcharge.
This case follows the logic applied to CIL in the Orbital case, which we reported on here. It appears that there is no flexibility when it comes to compliance with CIL regulatory requirements. Interestingly, these two cases show that this stance can work for or against Developer’s interests.
In October 2018, the Government's consultation response recognised the "disproportionate impact of the penalties for failing to submit a Commencement Notice before development starts", and future legislation is expected to soften the impact of such fines. Nevertheless, developers should continue to abide by the strict procedural requirements of the CIL Regulations to avoid financial penalties.
What is the law?
What should Mr Jones have done in order to be compliant with the CIL Regulations?
submitted a Commencement Notice in accordance with the requirements of Regulation 67 before commencing works;
submitted a claim for the self-build exemption in accordance with the requirements of Regulation 54B(2) and awaited the collecting authority's decision before commencement.