A Complete Guide to the Community Infrastructure Levy (CIL): Statutory Location, Calculation, Reliefs, and the s.106 Overlay

The Community Infrastructure Levy is one of the most commonly misunderstood charges in the UK property-tax landscape. CIL is not a tax. It is a planning charge created by Part 11 of the Planning Act 2008 and operationalised by the Community Infrastructure Levy Regulations 2010 (SI 2010/948). Liability is triggered by commencement of development under a planning permission, not by buying land and not by occupying a building. The charge is administered by the local planning authority acting as charging authority, not by HMRC.

This page is the framework primer for landlords undertaking conversions, property developers, self-builders, and the conveyancers and tax advisers who run CIL due diligence on acquisitions. It walks the statutory anchor, the calculation mechanic, the reliefs catalogue, the commencement-notice and assumption-of-liability discipline, the surcharge architecture, and the operating boundary between CIL and section 106 planning obligations.

CIL is not SDLT and not council tax

The single most common drift in popular CIL coverage is to position it alongside SDLT or council tax. The three regimes sit in different statutes, hit different liability events, and are administered by different authorities.

• SDLT is created by Part 4 of the Finance Act 2003. It is a tax on a chargeable land transaction, paid by the buyer to HMRC. The trigger is acquisition. The amount is calculated on the chargeable consideration under section 51 FA 2003 with the band rates in section 55 and Schedules 4ZA, 5 and 6ZA.
• Council tax is created by Part I of the Local Government Finance Act 1992. It is an annual occupation charge on dwellings, paid by the resident (or the owner where no resident exists) to the billing authority. The trigger is the existence of an occupied or potentially occupiable dwelling on the council-tax valuation list.
• CIL is created by Part 11 of the Planning Act 2008 and operationalised by SI 2010/948. It is a one-off charge on development, paid by the party that has assumed liability (or the landowner-at-commencement as default) to the local planning authority. The trigger is commencement of development under a planning permission.

A buyer who acquires a development site, secures planning permission, and then builds will routinely trigger all three regimes at different stages. There is no statutory offset between them. The SDLT calculation does not deduct CIL. The CIL calculation does not deduct SDLT. The council tax band on the completed dwelling does not deduct either. Cost-modelling has to treat them as three separate liability events.

The statutory architecture in one read

The two operative texts are Planning Act 2008 Part 11 (the enabling power) and SI 2010/948 (the regulations that make CIL work). Both have been amended several times since 2010, most recently by Part 4 of the Levelling-up and Regeneration Act 2023.

Planning Act 2008 Part 11

Section 205 gives the Secretary of State the regulation-making power and states the statutory purpose: ensuring development costs are funded in a way that does not render development economically unviable. Section 206 designates local planning authorities, the Mayor of London, the Broads Authority, and the Council of the Isles of Scilly as charging authorities. Section 208 establishes the liability framework on commencement. Section 209 defines development for CIL purposes and provides the commencement-date and planning-permission take-effect mechanics. Section 213 governs the charging-schedule examination and approval process by which an LPA adopts CIL.

SI 2010/948 in five blocks

• Part 2 (regulations 4 to 11): charging authorities and their core duties.
• Part 3 (regulations 12 to 28): the charging schedule. An LPA must adopt and publish a charging schedule before it can charge CIL. The schedule sets rates in pounds per square metre of net additional internal floorspace, broken out by development type and geographic zone.
• Part 4 (regulations 29 to 39): liability. Default liability is on the landowner at the time of commencement. The Assumption of Liability mechanism via Form 1 (or the LPA's online equivalent) allows another party, typically the developer or a serviced-plot buyer, to take on the liability before commencement.
• Part 5 (regulations 40 to 50): chargeable amount calculation. The headline formula is rate multiplied by net additional internal floorspace, with the BCIS All-in Tender Price Index ratio applied for inflation indexation between the charging-schedule adoption date and the planning-permission grant date.
• Part 6 (regulations 42 to 58): exemptions and reliefs. Minor development exemption, charitable relief, social housing relief, self-build whole-house exemption (regulation 54A), self-build annex and extension exemptions (regulations 42A to 42C), discretionary relief under section 49A.

Parts 8 and 9 then deal with payment, instalments, surcharges and enforcement. Surcharges and interest can exceed the principal CIL liability if the discipline of Form 1, Form 6, and timely payment is missed.

Who pays the CIL liability

The default position under regulation 31 is that the landowner at the time of commencement is liable. This is the statutory default that applies if no party takes any procedural step. It is the position that catches buyers who acquire land mid-development without due diligence: the CIL liability runs with the land if no Form 1 has been submitted, and the buyer inherits the bill.

Before commencement, a developer or buyer can submit a Form 1 Assumption of Liability notice (or the equivalent online submission). This shifts the liability to the named party. The Form 1 is short and procedural. It does not require the LPA to accept or approve, only to acknowledge. The discipline for any developer or self-builder is therefore to file Form 1 as soon as the LPA's CIL liability notice is received and well before any material operation on site.

The calculation: rate, net additional floorspace, BCIS uplift

Regulation 40 sets the formula. In plain terms:

1. Identify the LPA's CIL rate for the relevant development type and zone, as set out in the adopted charging schedule. Mayoral CIL (where London) stacks on top of the borough CIL rate.
2. Calculate the net additional internal floorspace in square metres. This is the new gross internal floorspace less any existing-building floorspace on the site that has been in lawful use for at least six months in aggregate during the three years before development begins (regulation 40(7)).
3. Apply the BCIS All-in Tender Price Index uplift: multiply the rate by the ratio of the BCIS figure for the year planning permission was granted to the figure for the year the charging schedule was adopted.
4. Multiply the indexed rate by the net additional internal floorspace.

The lawful-use deduction in regulation 40(7) is one of the most overlooked components. If an existing building on the site has been used as offices, retail, or industrial space within the three-year window, its floorspace is deducted from the new build's gross internal floorspace before applying the rate. The "six months in aggregate" test is not a continuous-occupation test; intermittent occupation that totals six months across the window qualifies.

A worked example. Patel Developments Ltd takes planning permission in 2026 for a new residential block in a borough with a CIL rate of 180 pounds per square metre, set in a charging schedule adopted in 2015. The BCIS uplift from 2015 to 2026 takes the rate to roughly 290 pounds per square metre. The new block has a gross internal floorspace of 1,400 square metres. There is an existing office building on the site of 350 square metres that has been in lawful use through to 2025. The net additional internal floorspace is 1,400 minus 350 equals 1,050 square metres. The chargeable amount is 290 multiplied by 1,050 equals 304,500 pounds.

Reliefs and exemptions

The reliefs catalogue is structured around six headings. Each requires a formal application. Most are forfeited if claimed after commencement.

Minor development exemption (regulation 42)

Gross internal floorspace less than 100 square metres AND no new dwelling created. The 100-square-metre threshold is gross, not net, and the "no new dwelling" condition means a small extension to an existing house qualifies but a tiny new infill dwelling does not. The exemption is automatic in the sense that no formal application is required, but the discipline is to confirm with the LPA before any work starts.

Self-build whole house exemption (regulation 54A)

Inserted by SI 2014/385. Applies where the dwelling is a primary residence built or commissioned by the owner-occupier for their own occupation. The exemption is conditional on a three-year clawback period during which the owner must occupy the dwelling as their main residence. If the owner ceases to occupy within three years of the building-completion compliance notice, the CIL liability is reinstated.

Self-build annex or extension exemption (regulations 42A to 42C)

Also inserted by SI 2014/385. The annex must be wholly within the curtilage of the main dwelling and be ancillary to it. The extension test is more permissive but still tied to the principal-dwelling occupation. Typical use case: a self-builder extending an existing family home with a separate annex for a relative.

Charitable relief (regulations 43 to 48)

The charity must own the chargeable interest at commencement AND will use the building wholly or mainly for charitable purposes. Mixed-use developments by charitable owners require careful structuring to qualify for the full relief.

Social housing relief (regulations 49 to 50)

Available where the development delivers qualifying social housing units. The relief tracks the social housing element only; market-housing components of the same scheme remain chargeable.

Discretionary relief (section 49A)

The LPA may grant discretionary relief in exceptional viability cases. Use is rare and granted on a project-by-project basis where the standard reliefs do not cover the situation and the development would otherwise be non-viable.

Commencement notice, payment discipline, surcharges

The procedural architecture is built around two forms and a clock.

Form 1: Assumption of Liability

Submitted before commencement. Shifts liability from the default landowner to the named party. Procedural and short. The single most important administrative step in CIL practice.

Form 6: Commencement Notice

Submitted to the LPA before any material operation. The Form 6 starts the payment clock. Standard payment is within 60 days of commencement, unless the LPA has adopted an instalment policy that allows phased payment.

The surcharge stack

• Regulation 83 (failure to submit Commencement Notice before commencement): 20 per cent surcharge or 2,500 pounds, whichever is lower.
• Regulation 84 (failure to submit Assumption of Liability before commencement): 50 per cent surcharge or 2,500 pounds, whichever is lower.
• Regulation 85 (late payment): 5 per cent surcharge after 30 days past due, additional 5 per cent after 6 months, additional 5 per cent after 12 months.
• Interest: accrues at Bank of England base rate plus 2.5 per cent.

Aggregate surcharges and interest on a 100,000 pound CIL liability missed in standard payment can exceed 20,000 pounds within twelve months. The LPA may also issue a CIL stop notice halting development. The CIL becomes a local land charge registered against the title, and is discoverable on any subsequent disposal, which materially affects sale value and remortgage availability.

CIL and section 106: division of labour

Section 106 of the Town and Country Planning Act 1990 creates negotiated planning obligations that are tied to specific developments. Section 106 is older than CIL and operates independently of it. The two regimes share no statutory cross-reference, but regulation 122 of SI 2010/948 sets the policy test for section 106 contributions: an obligation may constitute a reason for granting planning permission only if it is necessary, directly related to the development, and fairly and reasonably related in scale and kind.

The practical division of labour after CIL was introduced is:

• CIL funds strategic infrastructure across the LPA area (transport links, schools, area-wide leisure, public realm).
• Section 106 funds site-specific mitigation (the access road for this development, the affordable housing within this scheme, the open space within this layout).

The pre-April-2015 five-pooling restriction (no more than five section 106 contributions could be pooled toward any single infrastructure project) was relaxed by SI 2019/1103. The Infrastructure Funding Statement framework now governs how LPAs report CIL and section 106 income and expenditure.

Conversions, change of use, and CIL

A conversion of an existing non-residential building into residential use can trigger CIL where it creates net additional internal floorspace AND falls within a chargeable development type under the LPA charging schedule. The lawful-use deduction in regulation 40(7) is the key mechanic: where the existing building has been in lawful non-residential use within the three-year window, its floorspace is deducted from the gross internal floorspace of the new development.

A landlord converting a small office (under the 100-square-metre minor development threshold) into a residential dwelling typically falls within the minor development exemption only if no new dwelling is created. Creating a new dwelling, even within the 100-square-metre envelope, takes the scheme out of regulation 42 and into the standard charging regime unless another relief applies.

A typical landlord-conversion fact pattern: Singh-landlord owns a 90-square-metre commercial unit. He converts it to a single residential dwelling under Class MA permitted development rights. The CIL position turns on whether the LPA charging schedule sets a non-zero rate for this development type and zone, whether the lawful-use deduction reduces the net additional internal floorspace, and whether the minor development exemption applies (it does not, because a new dwelling is created). Stage-of-project CIL due diligence is therefore essential for any landlord moving into conversion work.

How CIL sits alongside the wider property-tax landscape

For a developer or self-builder, the position is best modelled as four independent liability events:

• Acquisition: SDLT under FA 2003 Part 4 on the purchase price (or non-residential rates where the site qualifies). See our business rates vs council tax page for the regime-distinction context, and our SDLT content set for the chargeable consideration mechanics.
• Planning permission: no immediate CIL liability on grant of permission. The liability crystallises on commencement.
• Commencement of development: CIL under PA 2008 Part 11 + SI 2010/948 on net additional internal floorspace, calculated as above. Section 106 contributions are typically negotiated and signed as part of the planning permission package.
• Completion and first occupation: council tax under LGFA 1992 starts from the completion day under s.17 LGFA 1992 + Sch 4A LGFA 1988. See our council tax for new builds page for the completion-notice mechanic.

For developers operating through an SPV, the SPV's corporation-tax position, the SDLT on acquisition, and the CIL on commencement are three independent calculations. None offsets another. The financial model has to carry each separately.

The LURA 2023 Infrastructure Levy and CIL

Part 4 of the Levelling-up and Regeneration Act 2023 introduced an Infrastructure Levy framework as a longer-term replacement for CIL. As at the time of writing, the Infrastructure Levy is being rolled out in test authorities only, and CIL remains operative across the existing CIL-charging LPAs. The transition timeline is set out in the LURA 2023 commencement orders, and the Department for Levelling Up, Housing and Communities (now Ministry of Housing, Communities and Local Government) is publishing implementation guidance on a rolling basis.

For developers and self-builders working on projects in 2026 and 2027, the operative regime in nearly all CIL-charging LPAs remains CIL under PA 2008 Part 11 + SI 2010/948. Any pre-acquisition due diligence should check (i) whether the LPA in question is a CIL-charging authority, (ii) the current charging schedule, (iii) any pending revisions to the schedule, and (iv) whether the LPA has been designated as an Infrastructure Levy test authority.

A short note on enforcement realities

CIL enforcement has tightened materially since the early years of the regime. LPAs are routinely issuing surcharges for missed Form 1 and Form 6 filings. The CIL stop notice power is being used more often than it was in 2015 to 2018. The local-land-charge consequence is the cost-driver that surprises developers most often on subsequent disposal: an unpaid CIL liability disclosed on title can collapse a sale or force a price renegotiation.

The working position for any developer or self-builder is: read the LPA's CIL liability notice carefully on receipt, file Form 1 promptly, file Form 6 before any material operation, plan the payment timeline around the 60-day clock, and apply for any available relief before commencement. If anything in that chain has gone wrong, the right first step is to engage a CIL adviser before the surcharge stack runs further.

If you are a property developer, landlord undertaking a conversion, self-builder, or professional adviser running CIL due diligence on an acquisition, the form at the foot of the page is the route to a structured first-pass assessment. Property Tax Partners works across the SDLT, CIL, council tax, and section 106 frameworks in combination, which matters for any project where more than one regime is in play.