Guide
Community Infrastructure Levy explained
What the Community Infrastructure Levy (CIL) is, how it's calculated, when it's payable, and how it differs from Section 106 agreements. Essential reading for developers undertaking new construction.
The Community Infrastructure Levy (CIL) is a fixed charge on new development used to fund local infrastructure. Unlike Section 106 agreements, CIL is non-negotiable - it's calculated using the charging authority's published rates and is payable regardless of site-specific impacts.
Not all areas have CIL, but where it applies, it's an additional cost you must factor into your development appraisal. This guide explains how CIL works and how to calculate your liability.
What is CIL?
Does CIL apply in your area?
CIL is set by charging authorities (usually the local planning authority or mayor). Not all areas have adopted CIL - you must check with your local authority.
How to check
- Visit your local planning authority's website
- Search for "CIL charging schedule" or "Community Infrastructure Levy"
- Check whether your development type and location are covered
If there's no CIL
Some areas haven't adopted CIL. In these areas, infrastructure contributions are typically secured through Section 106 agreements instead. This can be an advantage (S106 is negotiable) or disadvantage (less certainty on costs).
How CIL is calculated
CIL is calculated using a simple formula:
CIL = Net increase in floor area × CIL rate × Indexation factor
Key elements
- Net increase: New floor area minus any existing floor area in lawful use (occupied within 6 months before permission)
- CIL rate: £ per square metre, set by the charging authority. Rates vary by use class and sometimes by zone within the authority's area.
- Indexation: Rates are adjusted annually using the BCIS All-In Tender Price Index
Example calculation
Building 10 houses totalling 900 sqm GIA in an area with CIL rate of £200/sqm:
- Net floor area: 900 sqm
- CIL rate: £200/sqm
- Basic CIL: 900 × £200 = £180,000
- Plus indexation adjustment (typically adds 5-10%)
CIL vs Section 106
CIL and S106 are complementary mechanisms that work differently:
When is CIL payable?
CIL becomes due when development commences - defined as the first material operation (excavation, laying foundations, etc.).
Important steps before commencement
- Submit Assumption of Liability form: Confirms who will pay CIL
- Submit Commencement Notice: At least one day before starting work
- Claim any exemptions or relief: Before commencement (see separate guide)
If you start without proper notice
Starting development without submitting the required forms can trigger surcharges and make the full CIL amount payable immediately. The forms are administrative but essential.
Payment terms
Charging authorities typically allow payment in instalments for larger liabilities. Check your authority's instalment policy - it may allow payment over 12-24 months.
Exemptions and relief
Several exemptions and reliefs can reduce or eliminate your CIL liability:
Step-by-step: Managing CIL on your development
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Check if CIL applies in your area
Visit your local planning authority's website or contact their CIL team. Download the charging schedule to see rates for different development types and zones.
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Calculate your indicative CIL liability
Use the formula: net floor area × CIL rate × indexation. Include this in your development appraisal alongside S106 assumptions. For accurate figures, contact the CIL team.
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Consider exemptions and relief early
If your development might qualify for self-build, charitable, social housing, or other relief, investigate the requirements before planning submission. Some exemptions require specific applications.
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Submit Assumption of Liability form
Identify who will assume liability for CIL - usually the developer or landowner. Submit the form to the charging authority before commencement.
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Claim any exemptions before starting
Exemptions and reliefs must be claimed before development commences. Submit applications with supporting evidence and await formal approval.
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Submit Commencement Notice
At least one day before starting any work on site, submit a Commencement Notice to the charging authority. Keep proof of submission.
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Pay CIL or arrange instalments
Once you've commenced, CIL becomes due. Pay according to the authority's instalment policy or negotiate a payment schedule if needed.
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Keep records for clawback periods
If you've claimed exemptions (especially self-build), maintain records demonstrating continued compliance. Exemptions can be clawed back if conditions aren't met.
Developers: CIL is a non-negotiable cost
Unlike S106, you cannot negotiate CIL down through viability arguments. When appraising sites:
- Check the charging schedule: Rates vary by location and use. A site on the boundary between two zones might have significantly different CIL rates.
- Factor in indexation: CIL rates are indexed annually. Your actual payment will be higher than the published rate.
- Consider phasing: Instalment policies can help cash flow, but total liability remains the same.
- Explore exemptions early: Relief for self-build, affordable housing, or charity use can significantly reduce liability.