The Community Infrastructure Levy (CIL) was first introduced as a planning charge under Part 11 of the Planning Act 2008. This levy was introduced with the aims of supporting sustainable economic growth by investing the funds generated through the CIL into development schemes across England and Wales. For example, the CIL rates applied by the Mayor of London in 2012 to date have generated a reported £300 million to fund Crossrail.

In simple terms, CIL is applicable on the creation of new floor spaces which exceed 100 square metres of net internal area at fixed rates. The value of the CIL payment charged is dependent on the type (residential or commercial) and location of the development. In broad terms, the CIL is charged by a charging authority; those authorities who prepare local development plans. Before CIL can be applied to development plans, a charging authority must first have issued a charging schedule to lay out the applicable rates of CIL and outline the possible exemptions and relief programmes from the CIL.

Westminster City Council Implementation of CIL

As many of Attwells’ developer clients are based in central London, this article focuses on the Westminster Development Plan. Though it is important to note that differing rates of CIL may apply depending on the charging schedule approved by particular charging authorities. The Borough of Westminster reflects a relatively recent development of the implementation of the CIL on 1st May 2016 after the charging schedule was approved by Westminster City Council on the 20th January 2016. The funds raised from the Westminster CIL will be directed towards the development of transport and schooling infrastructure, in accordance with the Westminster Development Plan. This reflects of the broader aims underlying the CIL; to support economic growth through the creation and development of infrastructure which encourages businesses to grow.

The Westminster Development Plan

As of November 2013, the Westminster City Development Plan focused upon:

1)    Benefitting the community
2)    Improving neighbourhoods
3)    Delivering sustainable economic growth.

The borough of Westminster encompasses a complex urban context. Concentrated within this area of London are over 50,000 businesses and 70,000 employees using public transport of various forms to commute to work. The commercial charges raised by the CIL are intended to support sustainable growth in Westminster. Given the highly concentration of commercial buildings in relation to the demographic constitution of the area, all new developments supported by CIL funding will revolve around replacing older buildings for alternative developments predicted to yield higher economic value.

Application of CIL

The Westminster City Council acts as a charging authority with the power to impose the CIL in property development in the city of Westminster. Properties in Westminster are liable to pay CIL to both Westminster City Council and the Mayor of London; as is the legal requirement across all other London boroughs.  The following CIL rates apply to the commercial properties in Westminster and vary according to location within the borough:

  •     For ‘Prime’ Zone properties: £200 per square metre
  •     For ‘Core’ Zone properties: £150 per square metre
  •     For ‘Fringe’ Zone properties: £50 per square metre

It is the responsibility of the developer to supply the council with accurate information relating to the property in order for the Westminster council to determine the appropriate CIL charge required by the developer. Before any development can begin, the developer (or person assuming liability to pay CIL if different from developer) must complete an assumption of liability notice, a commencement notice and a notice of chargeable development to be sent to the Westminster City Council. Only once these documents have been received can the development proceed.

Commercial landlords are responsible for adhering to the payment instalment plan as outlined by the Westminster Council. The Council has outlined various instalment plans depending upon the total sum of CIL charges accumulated by the development.  Failure by the landlords to meet such payment plans can potentially incur serious financial fines and in the extreme case, a term of imprisonment. Tenants should be aware of the developer failing to assume liability for the CIL charge as this could pass on to the tenants themselves. Once again, we reiterate the point that if you own or rent a property and are uncertain whether you are liable to pay CIL that you contact Attwells for further advice.

Relief and Exemption

It is the responsibility of specific charging authorities to outline the necessary programmes for possible exemptions from the CIL or claims for relief. Legally defined circumstances warrant mandatory exemption from CIL; this is the case for charitable developments and developments of less than 100 square metres where this is not encompassing of an entire dwelling.  As well as defined qualifiers for exemption, Westminster City Council has various relief programmes in place to cater for any exceptional circumstances which may arise from the diverse conditions which characterise any development in the city. The Council of Westminster also provides social housing relief and all claims for relief should be made to the Westminster City Council as the charging authority, who will process the request accordingly.

The implementation of the CIL has a potentially serious  impact upon individual landlords and tenants as well as the wider community. At Attwells, it is our responsibility to stay up to date with the changes in legislation and advise our clients on how it could relate to them. We encourage anyone to seek our expertise if they have any doubts over the CIL and are happy to help talk through the potential charges one is liable to pay.

CREDIT Alexandra Pemberton, Work Experience Student.