- High Court Decision Quashes Planning Inspector’s Decision on Community Infrastructure Levy (CIL)
Kayleigh Chapman, in our leading Planning & Environmental law team, explains a recent High Court Decision to quash a planning inspector’s decision regarding Community Infrastructure Levy (CIL).
In a recent High Court decision (R (on the application of Shropshire Council) v Secretary of State for Communities and Local Government  EWHC 16 (Admin)), the Court ruled that an email sent to a local authority’s Section 106 officer could not be a “commencement notice” for the purposes of Regulation 67 of the Community Infrastructure Regulations 2010 (as amended). The decision quashed a Planning Inspector’s decision to the contrary.
The Planning Inspector had held that although the relevant email did not comply with all of the requirements of Regulation 67, “in practice, substance, form and all intent and purposes the email communication [had] the same effect as Form 6”.
The interested party had applied for self-build exemption for a development. This was granted by the local authority. The local authority held that an email to the planning department informing the Council of his interest to start development did not comply with Regulation 67. Therefore it issued a demand notice for the full CIL charge. The interested party subsequently appealed to the Inspector who found in his favour but the local authority applied to the High Court to challenge this decision.
The relevant email was sent to the planning department on 10 July 2015 confirming that “site clearance works” would begin on 11 July 2015 and referring to a contribution required to be paid under a Section 106 Agreement.
Regulation 67 requires a commencement notice to:
- Be submitted in writing (either on the pre-prepared form (Form 6) available on the Planning Portal or in a form substantially the same);
- Identify the relevant liability notice
- State the intended commencement date
- Include other information as required by the pre-prepared form
The form or notice is required to be submitted to the relevant Collecting Authority “no later than the day before the day on which the chargeable development is to be commenced”.
On the facts before Mr Ockelton, the Judge in the case, concluded that the email dated 10 July 2015 did not meet the requirements of Regulation 67 and therefore he found in favour of the local authority. Mr Ockelton found that the conclusion by the Inspector “verge[d] on the irrational” as the email did not comply with the Regulations.
In practical terms this means that the interested party is required to pay circa £36,000.00 (the CIL liability) to the local authority. The Inspector’s decision was obviously more favourable than the Court’s judgment in that had it stood without challenge the interested party would have continued to benefit from the self-build exemption as the email had been interpreted as to comply with the relevant regulation in spirit.
A silver lining?
We have regularly prepared blogs which highlight the “unfairness” of the form-led system in respect of self-build exemptions. Namely that the drafting of the Regulations result in the loss of an exemption where a commencement notice is not served on the local authority prior to commencement of development. The consequence of this failure can lead to severe unintended financial consequences in sums of thousands of pounds as clearly evidenced by the ruling in the above case.
However, the Government has recently consulted on changes to the Regulations. This will be the seventh amendment to the original Regulations. One of the proposed revisions includes amending the consequences of failing to submit a commencement notice. The effect of the amendment will be that if a person obtains a self-build exemption they will not lose that exemption if they then fail to submit a commencement notice. Instead the local authority will be able to issue a surcharge equal to 20% of what would have been the CIL liability or £2,500, whichever is the lower.
We have made representations to the Government that the proposed wording should be further amended. Currently as drafted the local authority “must impose a surcharge” regardless of the circumstances which have led to failure to submit the commencement notice. We have made representations which would change “must” to “may” and give local authorities discretion over whether to issue a surcharge. We hope the Government will take this representation on board.
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This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.