The Head of Development Management has decided to waive certain CIL surcharges for a developer in a new dwelling construction project.

URL: https://democracy.cheltenham.gov.uk/ieDecisionDetails.aspx?ID=3365

Decision Maker: Head of Development Management, Enforcement and Compliance - Chris Gomm

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: No

Purpose:

Content: To waive the Community Infrastructure Levy (CIL) surcharges in so far as they relate to:   1. Failure to assume liability (Regulation 80) 2. Failure to confirm apportionment of liability (Regulation 81) 3. Failure to pay the requisite amount within the required time period i.e. late payment surcharge (Regulation 85 and 87)   Decline to waive the surcharge in so far as it relates to:   4. Failure to submit a Commencement Notice (Regulation 83)   Introduce a payment plan i.e. payment by instalments in order to assist the developer in payment the liability and the regulation 83 surcharge - payment in full to be received by 11.09.25 (£17,634.50) in connection with Planning Permission ref. 22/00072/FUL & 24/01313/AMEND (Construction of a new detached dwelling house with associated parking and amenity space. Technical details stage of the PIP process. (Ref: 21/01642/PIP) at 2 Charlton Court Road, Charlton Kings, Cheltenham, Gloucestershire GL52 6JB.   The consequence of this decision is a reduction in the amount of CIL received by the collecting authority of totalling £3,784.06.   It is important to note that as surcharges are not apportioned to the Neighbourhood Fund, the requested changes in the payment schedule would not impact parish CIL payments. Failure to assume liability This surcharge (£50) was imposed upon Homeward Properties Ltd, who were identified as the landowner once the collecting authority became aware of commencement of the development. The CIL Team automatically imposes this surcharge to ensure consistency, albeit it is not mandatory under the CIL regime, as regulations state it ‘may’ be imposed.   To decide on waiving this surcharge, the collecting authority must consider the circumstances that led to the breach of the CIL regulations, and implications of any changes considered.   Whilst several attempts were made to contact the applicant on the planning permission, these were not responded to until October 2023 after the registration of the Liability Notice. At this time, the CIL Team resent the liability notice, on the basis that this would be presented to the purchaser of the property, who would assume liability and complete the CIL process. It is unclear if this information was provided by the vendor, although the liability notice would have appeared on any Con29 report by Homeward Properties Ltd’s solicitors, had they been undertaken. The date of this breach was the date of deemed commencement (1st September 2024), 11 months after the ownership change.   Failure to apportion liability The second surcharge for consideration is the surcharge for apportionment of liability. CIL Regulation 81(1) states a ‘collecting authority is required to apportion liability to pay CIL between each material interest in the relevant land, it may impose a surcharge of £500 in respect of each of those interests.’.   This surcharge (£500) was also imposed on Homeward Properties Ltd, as they did not assume liability.   On review, this was erroneous. The regulation only refers to the surcharge for apportionment, not the failure to assume liability. The Valuation Office for Agency's (VOA) technical manual for Community Infrastructure Levy (CIL) further clarifies this. As the sole owner of the land subject to the charge, no apportionment under Regulation 34 was necessary.   Failure to pay the requisite amount within the required time period CIL Regulation 85 (1) is applicable where the amount payable is ‘not received in full after the end of the period of 30 days beginning with the day on which payment of the amount is due, the collecting authority may impose a surcharge on P equal to five per cent of the amount or £200, whichever is the greater amount.’   Due to the failure to submit a commencement notice (see below), payment was due in full and immediately from the date of the demand notice (7th April 2025). In accordance with this regulation, the surcharge (£734.06*) was calculated on the 12th of May 2025, once the 30-day period had passed from the demand notice date.   Consideration can be given to whether this surcharge is applied, as the diction of this regulation allows discretion to be used by collecting authority.   Furthermore, email contact was initiated on the 9th of April 2025 by Mr Higgins, which was not acknowledged by the CIL Team until after the 30-day period.   A further surcharge of 5% is required six months and one year after non-payment. In accordance with CIL Regulation 87, late payment interest was calculated at 2.5 percentage points above the Bank of England base rate, from the period starting on the day after the day payment was due. The regulations require this period to end on the date the payment is received, currently an unknown date. The amount of interest calculated for 35 days overdue (latest demand notice date) is £95.03*.   If the regulation 85 surcharge is upheld, late payment interest also ‘must be calculated’ (regulation 87(2)).   Failure to submit a commencement notice CIL Regulation 83(1) A states: ‘where a relevant development is commenced before the collecting authority has received a valid commencement notice in respect of the development, then instead of any surcharge that may be imposed under paragraph (1) the collecting authority must impose a surcharge equal to 20 per cent of the notional chargeable amount or £2,500, whichever is the lower amount’.   This regulation does not have the same discretion as to whether this surcharge is imposed.   Unfortunately, no commencement notice was submitted. This is not disputed by the liable party, as they did not believe they were required to pay CIL as the new build floorspace is under 100sqm Appendix B. This is incorrect as CIL is charged on new dwellings of any size. The maximum charge of £2,500 has been applied; the surcharge must therefore stand.   The changes would also result in the avoidance of further surcharges and interest if the payment is not made within six months and a year after the demand notice.   Payment plan It is considered reasonable to agree a payment plan with the developer to ensure that the financial burden of CIL payments can be spread over a defined period of time. The alternative option is that we do not waive the surcharges but continue to impose them. For the reasons set out above, this is not considered to be an appropriate nor reasonable course of action.

Date of Decision: June 20, 2025