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Applying BCIS CIL Indexation to outline permissions and phased development
First published by LEXISNEXIS
Royaume-Uni | Publication | octobre 2022
When calculating Community Infrastructure Levy (CIL) liability on an outline planning permission, which BCIS CIL Index rate should be used when reserved matters are approved? Is it the prevailing rate when the outline planning permission was approved, or the rate when reserved matters are approved?
Content
1. CIL indexation - the basics
| 1.1. | CIL is calculated by multiplying the net increase in gross internal floor space (in metres squared) that is consented by a planning permission by the relevant CIL rate for that type of floor space (in £ per metres squared) set out in the charging authority’s (CA’s) CIL charging schedule, plus any indexing for inflation / deflation. Indexation is applied between the year in which the charging schedule took effect and the year that chargeable development is granted consent. |
| 1.2. | The Community Infrastructure Levy (Amendment) (England) Regulations 2019 specify that from 1 January 2020 CIL rates set out in a CA’s charging schedule are subject to annual indexation using the BCIS CIL Index published annually by RICS. This annual index figure is published on the fourth Monday in October each year and applies from 1 January of the following year. The “BCIS CIL Index” is available on RICS’ website. The index was developed to ensure that CIL rates remain responsive to market conditions. The BCIS CIL Index is not normally subject to revision once published, although if RICS consider it necessary to amend a published index then this will only be done in agreement with the Department for Levelling Up, Housing and Communities (DLUHC). |
| 1.3. | The BCIS CIL Index should be applied as set out in the Community Infrastructure Levy (Amendment) (England) (No.2) Regulations 2019 and any guidance issued by DLUHC. Current guidance is set out in Planning Practice Guidance (PPG) at paragraph 099 Reference ID: 25-099-20190901. The PPG includes a flow chart that shows at what stage the liability is calculated in standard cases, as well as worked examples showing how the levy liability is calculated. |
2. CIL and phased development
| 2.1. |
Section 208(6) Planning Act 2008 provides: “The amount of any liability for CIL is to be calculated by reference to the time when planning permission first permits the development as a result of which the levy becomes payable.” Development liable for CIL is known as “chargeable development”. |
| 2.2. | The Community Infrastructure Levy Regulations 2010 (as amended) (the Regulations) at Regulation 9(1) advise that the chargeable development is the development for which planning permission is granted. Regulation 9(4) provides that “In the case of a grant of phased planning permission, each phase of the development is a separate chargeable development.” |
| 2.3. | Regulation 8 identifies when planning permission first permits chargeable development. Regulation 8(3A) provides that the date on which a phased development forming part of an outline planning permission is first permitted is the day on which final approval is given for the last reserved matter associated within that phase (Regulation 8(3A)(a)(i)); or if earlier, (and agreed by the CIL collecting authority) the day on which final approval is given under any pre-commencement condition associated with that phase (Regulation 8(3A)(a)(ii)). Where an outline permission is not phased then Regulation 8(4) provides that planning permission first permits development on the final approval of the last reserved matter associated with that permission. |
| 2.4. | In relation to a phased development that is not consented by an outline permission, then Regulation 8(3A)(b) provides that the date on which such development is first permitted is the day on which final approval is given under any pre-commencement condition associated with that phase; or where there are no pre-commencement conditions, on the day that planning permission is granted. |
3. BCIS CIL Indexation and phased development
| 3.1. | Since each phase of an outline permission (even if it is a single phase development) is treated as a separate chargeable development, which is first permitted on the date that the final approval of reserved matters is given for that phase, then BCIS CIL Indexation will be applied between the year in which the relevant charging schedule took effect, and the year that that final reserved matter is consented. Alternatively, BCIS CIL Indexation will be applied between the year in which the relevant charging schedule took effect, and the date (if agreed) on which the final pre-commencement condition is discharged for that phase, if this precedes the date of the final approval of reserved matters for that phase. In other words, the BCIS CIL Index is not applied when outline permission is granted. |
| 3.2. | Where phased development is consented other than by way of an outline planning permission, then BCIS CIL Indexation will be applied between the year in which the relevant charging schedule took effect, and the year that that final pre-commencement condition is discharged; or if there are no pre-commencement conditions then indexation will be applied between the year in which the relevant charging schedule took effect, and the date that the permission is consented. |
Head of Planning; Partner
Courriel
sarah.fitzpatrick@nortonrosefulbright.com
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