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Community Infrastructure Levy - Self-Builder Pays Dearly for Procedural Lapse

Those who build their own homes are generally exempt from having to pay the Community Infrastructure Levy (CIL).  However, as a High Court case showed, the procedural requirements for applying for such an exemption are both complex and mandatory and that is why it is always wise to seek professional advice.

A self-builder had obtained planning consent to construct a detached house with a triple garage. He duly applied for a certificate exempting him from £36,861 in CIL that would otherwise have been payable. He subsequently sent a council official with whom he had been dealing an email giving a date on which clearance work would begin on site. The email was acknowledged and the official stated that the council's records had been updated.

Shortly afterwards, however, the council issued the man with a notice, requiring immediate payment of the full amount of CIL, plus a surcharge of £2,500. The notice stated that, as a valid commencement notice had not been served before the development started, he was not entitled to exemption from CIL.

In subsequently upholding the man’s appeal against that decision, a government planning inspector found that the email constituted a valid commencement notice, notwithstanding that it was not in the form prescribed by Regulation 67 of the Community Infrastructure Levy Regulations 2010 (the Regulations).

In upholding the council’s challenge to that decision, the Court found that the email was incapable of being a commencement notice for the purposes of Regulation 67. The Regulations made perfectly clear that the consequence of failing to serve a valid commencement notice before work on a self-build development starts is loss of the exemption.

The inspector's conclusion that the email failed to meet the requirements of Regulation 67, but was nevertheless a valid commencement notice, verged on the irrational and was certainly insufficiently reasoned. Guidance and correct forms for the issuing of commencement notices were readily available and had been made available to the man. In those circumstances, his difficulties had arisen as a consequence of his own acts and there was no good reason why he should be relieved of that consequence at the expense of local taxpayers.

The council did not challenge the inspector's conclusion that the commencement date was as stated in the email, rather than a later, deemed, commencement date contended for by the council. That meant that new demand notices would have to be issued and, if they included any surcharge, the man would have a fresh right of appeal.

R on the Application of Shropshire Council v The Secretary of State for Communities and Local Government. Case Number: CO/4218/2017

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