A High Court decision concerning self build Community Infrastructure Levy (CIL) exemption has set out the importance of observing the process to the letter for anyone building their own home.

In Shropshire Council v Secretary of State for the Communities and Local Government [2019] the High Court set out that in order for exemption to be granted, as set out in the Community Infrastructure Levy Regulations 2010, the due process must be adhered to, and most specifically in relation to the notifications.

In the case, a self builder obtained planning permission for a detached homs in Shropshire, with a CIL liability of £36,862. This would have been considered an exemption, apart from the fact that he failed to fill in the relevant forms before commencing work, and rather relied on an email to Shropshire Council’s planning department on 11 July 2015.

This was followed by a demand notice from the council for the full amount of the CIL, plus extra as a surcharge, on the basement that no Commencement Notice had been filed. The self builder in question successfully appealed the charge, and the council then challenged the inspector’s decision.

The court held that the CIL Regulations outline a prescribed statutory procedure, and consequently all the due processes must be observed, as set out therein. Effectively, an email was insufficient as a means of notification of commencement of work.

Lobbying for self builders

NaCSBA is fully aware of the issues around CIL exemption, as several self builders a year fail to complete the process in the right order, and inadvertently end up having to pay the levy. It has made Government aware of the shortcomings of the prescriptive process when it comes to what are often amateur, first-time self builders navigating the process.

In response to consultation on supporting housing delivery through developer contributions (October 2018) Government stated that it recognises the disproportionate impact of the penalties for failing to submit a Commencement Notice before development starts. In this instance, the exemption is withdrawn, and the whole Community Infrastructure Levy liability becomes immediately payable.

Steps have been taken to clarify the process for claimants with the Planning Portal to improve clarity of relevant Community Infrastructure Levy forms.

However, this ruling is a warning to self builders that they are not exempt from the process itself, and must follow the regulations to the letter to qualify for exemption. Consequently, anyone planning a self-build must make themselves fully aware of what is exempt and how the exemption works, as the precise rules include specific dates.

Self builders can find advice on NaCSBA’s Self Build Portal, but recommends they speak to their LPA CIL officer at the earliest opportunity in their project to discuss CIL as it can have a serious impact on budget.

NaCSBA is also hoping to see changes to the penalties associated with the failure to submit a Commencement Notice before development being started. This will ensure that any penalty is set at a proportionate level and will not result in the whole liability becoming payable immediately.

It will also consider how guidance could be used to manage these effects by encouraging authorities to take account of these issues when setting Levy rates and following due process choosing how they use existing powers.

“At a time when this country needs more homes and better homes it is disappointing to see the technicalities of the CIL process being contested in court. This judgement reinforces the care individuals must take when seeking an exemption and the need for the Government to press ahead with its plans to address the disproportionate impact that errors can make. We hope that individuals and groups will not be deterred by the current complexities from the wider benefits that custom and self build can deliver,” said NaCSBA CEO Andrew Baddeley-Chappell.

Developers can also struggle with the complex rules around CIL when bringing forward serviced plots, and the Right to Build Task Force is available to provide guidance where needed, helping to avoid costly mistakes.

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