What is the Community Infrastructure Levy? 

The Community Infrastructure Levy (CIL) is a charge that local authorities may place on new developments to raise funds for the local authority to fund local infrastructure. Generally speaking developments that create a new floorspace of 100m2 or more, or that create new dwellings of any size, are liable to be charged CIL. There are exemptions and reliefs for certain developments and developers. 

The exact rate of CIL varies between local authorities, the zones within them, and the type of development. But as an example, a residential development in Canterbury’s Zone A may be liable to CIL at a rate of £187 per squared metre, which can quickly add up to high costs.  

This article examines some recent cases where CIL has been charged on agricultural developments, often in surprising ways, which suggest that local authorities are taking a tough stance when imposing CILs. 

Exemption of Certain Buildings

Certain developments are exempt from being charged CIL. This includes buildings “into which people do not normally go”. 

In a recent case (December 2024) CIL was charged on the building of an agricultural storage barn. The developer sought to argue in appeal that the building should be exempt as being one into which people do not normally go. They argued that: “people would only occasionally and intermittently go into the shed, for the hitch-up of machinery or pick-up of baled straw on an infrequent basis”. 

However, the valuation office dismissed the appeal and upheld the CIL charge. They looked to the fact that the building was an agricultural outbuilding on a working agricultural farm unit, and found there would reasonable frequency of use. They held that the word “normally” in the exemption should: “reflect the normal use of the building and not be time-restricted in its use or frequency of use”. 

Local Charging Schedules

The local authority must have a local charging schedule to impose CIL. Each charging schedule is different and made specifically for that area. They can set additional rules on what is and is not chargeable, and at what rate, beyond the statutory regime. 

In one case (November 2024), planning permission was granted to erect a farm manager’s dwelling and separate herdsman accommodation. The herdsman’s accommodation was above the garage block for the farm manager’s dwelling. It was a condition of the planning permission that the herdsman accommodation could only be used for purposes ancillary to the approved dwelling, as is common for annexes.  

The local charging schedule set a CIL of zero for single dwellings. When CIL was then charged, the developer argued that that the development was a single dwelling (the herdsman accommodation was ancillary) so should be exempt from CIL. They pointed to the condition in the planning permission which essentially restricted the development to a single dwelling. 

The valuation office upheld the CIL. They agreed that the planning condition would mean the herdsman’s accommodation would not be classified as a separate dwelling under the CIL legislation, but stated that what really mattered was the charging schedule. “Single dwelling” was not defined in the schedule, so the valuation office turned to the dictionary definition of dwelling as “a house or place to live in” and single as “only one”. On this basis, and given the annexe contained all the utilities for independent living, the valuation office found this to be two separate dwellings, i.e. farm manager’s dwelling and separate herdsman accommodation and upheld the CIL charge. 

Offset of In-Use Land 

The rules for calculating the amount of CIL chargeable on a development are set out in legislation. Though complex, the calculation is in essence based on the area of land being developed and is designed to remove from consideration any areas already in use. However, the following two cases suggest that what is deemed “in use” may be less straightforward than it seems.

In one case (December 2024) planning permission was obtained to change the use of an agricultural barn to three dwellings. No CIL was charged at the time because the existing floorspace was in use. However, during development an arson attack saw the barn burnt to the ground. The developer continued with the development and applied for retrospective planning permission, at which point the local authority issued a notice to charge CIL on the entire floorspace. The developer lost their appeal against the charge. It was held that, because the original barn was demolished prior to the second planning permission being granted, the new building could not be said to have lawful use at the point at which CIL was considered, and as such there was no in-use floorspace to offset against the charge. In other words, any ongoing use of the land was ended by the arson attack, and CIL could then be imposed on the full floorspace covered by the second planning application. 

In another case (November 2024) planning permission was granted to convert existing farm buildings to a live/work dwelling. During development, amendments were made that were deemed to be material and the developer therefore had to seek a lawful development certificate for the creation of a dwellinghouse. The local authority granted the certificate for the building works, but not for the residential use, as the developer could not demonstrate the requisite ten years’ continuous residential use. The developer therefore had to seek a second, retrospective planning permission to use the buildings as dwellings. CIL was imposed. The developer argued on appeal that CIL should not be imposed due to the existing in-use floorspace, but again the valuation office held that the building was not being lawfully used as a dwelling and as such its area could not be offset. 

In conclusion, the above cases suggest that CIL will be charged wherever possible. Developers would be well advised to seek the assistance of a planning expert when considering a development and applying for planning permission. Purchasers of land for development purposes should also request that their conveyancer commissions a local authority search, to obtain details on whether the land is liable to CIL and any planning history to be taken into consideration.

Please contact Thomas Picknell or another member of our Commercial Property team if you would like to discuss the Community Infrastructure Levy or any other Commercial Property matter.