Construction & Property

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.

UK-wide
Guide summary

Check if the Community Infrastructure Levy (CIL) applies to your development. Pay CIL based on your local authority's rates before starting work. Submit the required forms to avoid penalties. Some developments may be exempt.

  • Check if CIL applies in your area with your local council
  • Submit Assumption of Liability form (CIL Form 1) before starting
  • Pay CIL based on square metres of new floor area
  • Submit Commencement Notice at least 1 day before starting work
  • CIL rates vary by area and development type
  • Exemptions available for small, self-build or charitable projects
  • Late submissions can lead to surcharges or full payment immediately
  • CIL is non-negotiable unlike Section 106 agreements
  • Keep records of payments and forms for at least 2 years
  • Check local instalment policies for larger payments
On this page
UK-wide

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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 an 'in-use building' - one in lawful use for a continuous period of at least 6 months within the 3 years ending on the day planning permission first permits the development (CIL Regulations, regulation 40)
  • 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 RICS CIL Index (prepared by BCIS)

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

  1. Submit Assumption of Liability form: Confirms who will pay CIL
  2. Submit Commencement Notice: At least one day before starting work
  3. 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

  1. 1

    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.

  2. 2

    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.

  3. 3

    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.

  4. 4

    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.

  5. 5

    Claim any exemptions before starting

    Exemptions and reliefs must be claimed before development commences. Submit applications with supporting evidence and await formal approval.

  6. 6

    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.

  7. 7

    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.

  8. 8

    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.

Construction & Property Requirement

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.
GOV.UK CIL guidance (opens in a new tab)