The flow of appeals against surcharges and deemed commencement dates under regulations 117 and 118 of the Community Infrastructure Levy Regulations 2010 to the Planning Inspectorate continues unabated. Christopher Cant looks at what can be learned.
This flow of appeals serves to emphasise that many owners and developers even now have failed properly to get to grips with the CIL process. That explains why some of the lessons below have appeared in earlier articles over the years yet still are the subject of appeals. Some of the decisions serve also to indicate the complexity of the CIL regime.
1. Delay in serving liability notice
A delay in serving a liability notice will not affect whether or not there is a continuing CIL liability. The commencement of a development will trigger a CIL liability and the right to require payment will not be lost if the local authority is slow in serving a liability notice. That delay will, however, affect whether or not surcharges can be imposed. Reg. 65 requires that a liability notice be served by a collecting authority as soon as reasonably practicable after the day on which the planning permission first permits development which is normally the date of the grant. Recently delays of nine and ten months have been held not to satisfy this statutory requirement with the consequence that surcharges were quashed. The rational underlying this is that the liability notice is needed to enable the owner/developer to be able to serve a commencement notice and to know the amount of CIL due. Local authorities should make sure that a liability notice is issued soon after the grant of a planning permission to avoid unnecessary complications and disputes.
2. Proof of service
Not only must the liability notice be served timeously but the collecting authority must be able to prove service on the balance of probabilities. This may be on the relevant person or on an agent if this has been authorised by the relevant person. E-mails will be easier to prove if their use has been permitted as if post is the chosen method of service it will often not be enough to prove that the liability notice was posted. Provided the liability notice has been received there is no scope for mitigation. Recently rejected contentions have been that the e-mail went into the junk folder and that the recipient had limited English.
Subsequent purchasers, including receivers, will be bound even if not informed about the liability notice. The CIL liability is a local land charge which binds successors even if not registered as such.
3. Commencement notice
The need to serve a valid commencement notice no later than a day before the intended commencement date still continues to throw up problems which can have very serious consequences as regards the retention of a CIL exemption when both the planning permission was granted and the liability notice was served before 1st September 2019. Surprisingly it continues to be necessary to state that a notice is not a valid commencement notice if (i) no date is stated or it is stated that commencement will be as soon as possible; (ii) it is served after commencement or the date of the notice is back dated; (iii) an e-mail is sent to building control stating that a start is to be made or intends to attach a commencement notice but mistakenly fails to do so; (iv) the prescribed form is not used.
To the long list of failed justifications for not serving a commencement notice has been added (i) difficulties caused by covid; (ii) reliance on architect; and (iii) claimed assurance on behalf of the authority that no further steps were required. This latter rejection highlights an important feature of the CIL regime which some owners and developers find hard to come to terms with. The onus lies on the owner/developer to comply with the obligations imposed by it. It continues to be stressed by the appointed persons in such appeals that if no acknowledgement of receipt of a commencement notice comes from a collecting authority then it is a high risk strategy to commence the development without first checking with the authority that it has been received.
4. Commencement of development
When a development commences is a key element in the CIL regime. It is the trigger for the CIL liability crystalising although payment may be later. Regulation 7(2) provides that a development is to be treated as commencing on the earliest date on which any material operation begins to be carried out on the relevant land.
The issue as to whether or not a development has commenced will be important in determining whether the CIL liability has become payable but may also be material in the context of an exemption (particularly when the planning permission was granted and the liability notice issued before 1st September 2019). In a recent appeal  an authority had claimed a development subject to the self-build housing exemption had commenced based on photographs showing some metal fencing, a pile of rubbish, a portable toilet, a small digger and a skip which appeared to be empty. The appellant stated that the pile of rubbish arose from the widening of the existing vehicular access which enabled the equipment to be delivered. The development involved the conversion of a gospel hall into a dwelling together with some external works. It did not include an alteration to the access way so that did not constitute a material operation of the development. Neither the erection of metal fencing nor the parking of construction equipment was viewed to be material operations. In consequence the development had not commenced.
This decision had some similarity to an earlier decision concerning the replacement of a wall and which phase of the development that work related to. The extent of the work in that case is to be contrasted with another recent appeal decision in which buildings had been demolished and trenches had been dug. There was no doubt that material operations had been carried out. The carrying out of work on a site does not automatically mean that the CIL liability has been triggered. An assessment of the work needs to be made.
In this context it has to be borne in mind that unless the development authorised by a planning permission is expressed to be phased it is not possible to break up a development for the purposes of CIL. Planning permissions for additional floors on a terrace of houses are not infrequent. The development authorised unless the permission granted is a phased planning permission will be a single development and not a number of developments relating to each dwelling separately. Such a grant will often prevent individual houseowners claiming an exemption from CIL.
5. Developments under general consents
The definition of planning permissions for the purposes of CIL includes general consents (regulation 5(1)(g)) which in turn includes authorisation under a general development order. The application of the CIL regime to such developments is not without its particular difficulties. A proposed change of use authorised by a general development order in particular throws up unexpectedly complicated problems as to when the development commences for the purposes of CIL. Prior approval granted under that scheme does not constitute a planning permission for the purposes of CIL. However, details contained in the prior approval will be relevant when determining whether or not works are lawful.
In a recent appeal decision  prior approval had been granted for the conversion of an office to residential flats and the authority claimed that the development had commenced thereby triggering the CIL liability. Some conversion work had been carried out. The layout of one flat was in accord with the approved details whilst others were not. Two show flats had been created with internal walls and a kitchen but no services. The appointed person held that the works were not in accordance with the details approved and so the approved development had not commenced.
Further it was held that there had been no material operation because some of the works were not in accordance with the approved details and those that were did not constitute a material operation due to the exclusion in section 56(5) TCPA 1990. That sub-section excludes development carried out so as to comply with any condition or limitation subject to which a planning permission under a general development order has been granted. In the context of CIL it has an important role to play.
Lastly it was held that a material change of use constitutes a material operation (section 56(20(e)) but no such material change of use had occurred in this case. The show flats were not capable of providing facilities for the day to day living of a person and did not constitute a viable dwelling. Rather it was held to be a building in transition. In consequence the change of use had not taken place and so no material operation had been carried out by virtue of a change of use. This appeal illustrates the difficulties faced in determining when a CIL liability is triggered when the development is authorised by a general consent.
6. 2019 Amendments
The Community Infrastructure Levy (Amendments) (England) (No. 2) Regulations 2019 introduced a number of important amendments to the CIL regime with effect from 1st September 2019 including removing the statutory requirement that a commencement notice be served before the development is commenced albeit substituting a mandatory surcharge of 20% if one is not. Those amendments to CIL exemptions and reliefs apply if the relevant liability notice is issued on or after 1st September 2019 regardless as to whether the planning permission is granted before or after that date. However, the amendments are not retrospective and do not apply to revive a lost exemption or relief if the relevant liability notice was issued before 1st September 2019. 
 APP/N1920/L/20/1200390 para. 13