Community Infrastructure Levy (CIL) – Fact Sheet for Homeowners & Developers
What is CIL? The Community Infrastructure Levy (CIL) is a type of property tax that some local councils in England and Wales charge on new developments. It is designed to help pay for infrastructure such as roads, schools, parks, and community facilities needed because of new buildings in the area. If your project creates new […]
What is CIL?
The Community Infrastructure Levy (CIL) is a type of property tax that some local councils in England and Wales charge on new developments. It is designed to help pay for infrastructure such as roads, schools, parks, and community facilities needed because of new buildings in the area.
If your project creates new floorspace or changes the use of a building, you may be liable to pay CIL.
When does CIL apply?
You might have to pay CIL if you are:
- Building a new house or flat
- Extending an existing property significantly
- Converting a building into a new home
- Changing the use of a building to residential or other chargeable use
Not all councils have adopted CIL, and the rates can vary a lot between areas.
How is CIL calculated?
- Rate per square metre – Each council sets its own rates depending on the type of development and location.
- New floorspace only – In many cases, you only pay on the additional space you create, with some deductions for existing lawful floorspace.
- Indexation – Rates increase each year in line with inflation.
Can CIL be reduced or avoided?
Yes, there are exemptions and reliefs, but you must apply before starting work:
- Self-Build Housing Exemption – For people building or commissioning their own home to live in.
- Self-Build Extension or Annex Relief – For extending your own main home or building an annex.
- Social Housing Relief
- Charitable Development Relief
- Demolition or Existing Building Offsets – You may be able to deduct existing floorspace from the total.
Failing to apply in time can mean you lose the chance for relief and must pay in full.
Common CIL Pitfalls
- Starting work before submitting the right forms – This can automatically cancel your exemption rights.
- Incorrect council measurements – CIL amounts are based on floor area; errors can lead to overcharging.
- Misunderstanding “lawful use” – Existing buildings must meet certain criteria to count towards offsets.
- Multiple planning permissions – Can complicate the calculation and exemption process.
Examples from Real Projects
- A homeowner in Brighton saved £57,500 by claiming a self-build exemption on a care home conversion.
- A developer in Cheltenham avoided £46,400 after proving CIL should not apply.
- A client in Richmond reduced their CIL bill from £357,000 to zero with a combination of measurement corrections and self-build exemption.
Key Steps to Protect Yourself
- Check if your council charges CIL before applying for planning permission.
- Get advice early – Ideally before your application is submitted.
- Submit the correct forms (Form 1, Form 7, etc.) on time.
- Keep evidence – Photos, plans, declarations, and contracts.
- Do not start work until your exemption or relief is confirmed in writing.
Bottom Line: CIL can be a significant hidden cost, sometimes hundreds of thousands of pounds, but with the right advice, planning, and paperwork, you can often reduce or completely remove the charge.
Contact Jane Deeks at Deeks VAT Consultancy for professional vat consultant across all industries.
jane@deeksvat.co.uk | 07710553831 | LinkedIn