Community Infrastructure Levy: A Developer's Guide to Liability, Calculation and Payment

If you are bringing forward a development in England, the Community Infrastructure Levy (CIL) is a cost you need to understand before you commit. Unlike a Section 106 agreement — which is negotiated — CIL is a fixed, formula-based charge set by the local charging schedule. It is the developer's statutory liability, and getting the process wrong can cost you the right to pay in instalments, or trigger surcharges.

This guide explains how CIL works from the developer's side: who is liable, how the charge is calculated, the sequence of notices you have to deal with, and how CIL sits alongside Section 106.

This covers England only. This is general guidance, not legal advice. Always check your local charging authority's published charging schedule and take professional advice on your specific scheme.

What CIL Is — and How It Differs from Section 106

The Community Infrastructure Levy is a charge that local authorities in England can apply to new development to help fund the infrastructure needed to support growth. It was introduced by the Planning Act 2008 and is governed by the Community Infrastructure Levy Regulations 2010 (as amended).

The key distinction for developers:

• CIL is non-negotiable and formula-based. If your charging authority has adopted a charging schedule, the rate is fixed — pounds per square metre of net additional floorspace. There is no negotiation over the amount.
• Section 106 is negotiated and site-specific. An S106 planning obligation under the Town and Country Planning Act 1990 addresses the specific impacts of your scheme — affordable housing, highways works, education contributions — and is the subject of negotiation with the council.

Both are sometimes loosely called "planning gain," but they are separate mechanisms. Many schemes carry both a CIL liability and an S106 obligation. For more on the negotiated side, see our guide to S106 versus CIL.

Not every authority charges CIL. A charging authority must consult on and adopt a charging schedule before it can levy CIL. Where no schedule has been adopted, developer contributions rely on S106 alone.

Who Is Liable for CIL

Liability for CIL attaches to the development, not to a person — but someone has to assume it. The Regulations set out an order:

1. Whoever assumes liability. Any party with a material interest can submit an Assumption of Liability form before development commences. This is usually the developer.
2. The landowner(s) by default. If no one assumes liability before development starts, liability defaults to the owners of the land, and the full amount becomes due as soon as development commences — with no right to pay by instalments.

Assuming liability early is not a formality. It is what gives you access to the instalment policy and the ability to claim any reliefs or exemptions. A developer who starts work without assuming liability can lose those rights.

When Development Becomes Liable

CIL applies to most new development that creates net additional floorspace. The threshold and triggers:

• 100 square metres or more of net additional gross internal floorspace is potentially liable.
• Any new dwelling — a house or flat of any size — is potentially liable, even if it is under 100 square metres. The floorspace threshold does not protect new dwellings.
• Development of less than 100 square metres that does not create a new dwelling is generally not liable.
• Buildings into which people do not normally go — and structures that are not buildings (such as pylons or wind turbines) — are not liable.
• Development charged at a zero rate in the charging schedule is not liable.

"Net additional" matters: existing floorspace that has been in lawful use can, in defined circumstances, be deducted from the chargeable area. Demolition and reuse of existing buildings can reduce the chargeable amount, but the rules on what qualifies are specific — check them before assuming a deduction applies.

How CIL Is Calculated

CIL is calculated under Regulation 40 and Schedule 1 of the CIL Regulations 2010. The headline mechanism:

Chargeable amount = the charging schedule rate (£ per square metre) × net chargeable floorspace × an indexation factor.

The practical steps:

1. Find the applicable rate. Your charging authority publishes a charging schedule setting rates by use type (residential, retail, etc.) and sometimes by geographic zone. Rates vary widely between authorities and between zones within an authority.
2. Establish the net chargeable floorspace. Gross internal area of the new development, less any qualifying deductions for existing lawful floorspace.
3. Apply indexation. CIL rates are index-linked so the real value keeps pace with construction costs (see the next section).
4. Deduct reliefs and exemptions. Charitable, social housing, self-build, and other reliefs reduce or remove the charge.

One practical floor: if the calculated chargeable amount is less than £50, it is deemed to be zero and no levy is due.

Because rates differ so much by authority, there is no national CIL figure. Always work from the specific charging schedule that applies to your site — do not rely on a rate quoted for a different authority.

Indexation — Which Index Applies

CIL rates are indexed to construction-cost inflation. The index changed in 2020, and which index applies depends on when planning permission was granted:

• Planning permission granted on or after 1 January 2020: the RICS Community Infrastructure Levy Index applies. This index was introduced by the Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2019 and is based on the BCIS All-in Tender Price Index. It is published around 1 November each year and applies for the following calendar year.
• Planning permission granted before 1 January 2020: the BCIS All-in Tender Price Index figures apply.

The indexation factor compares the index figure for the year permission was granted with the figure for the year the charging schedule took effect. It can materially change the cash amount due, so factor it into your appraisal — do not work from the headline schedule rate alone.

The CIL Notice Sequence

Dealing with CIL is largely about getting the right forms in at the right time. The sequence a developer typically works through:

1. Liability Notice. Once planning permission is granted, the charging authority issues a Liability Notice setting out the chargeable amount and how it was calculated. Check it carefully — errors in floorspace or rate happen.
2. Assumption of Liability. Submit the Assumption of Liability form before you commence development. This is what unlocks instalments and reliefs.
3. Commencement Notice. Submit a Commencement Notice before any work begins on site. This fixes the date development started and triggers the payment timetable.
4. Demand Notice. After commencement, the authority issues a Demand Notice setting out the payment amount(s) and due date(s) under its instalment policy.

The timing discipline matters. If you do not submit a Commencement Notice before starting work, the full chargeable amount can become payable immediately — you lose the right to pay by instalments, and where a relief or exemption was in place, you can lose it and incur a surcharge.

Paying CIL: Instalments and Timing

Charging authorities can — and most do — publish an instalment policy allowing CIL to be paid in stages rather than as a single lump sum on commencement. The terms vary: some allow two or three instalments over a year or more, others stagger payments for larger liabilities.

Two points for developers:

• Instalment rights depend on having assumed liability and submitted a valid Commencement Notice. Miss either and the whole sum can fall due at once.
• Instalment policies are local. Check the policy that applies to your charging authority — do not assume the terms from another council apply to your scheme.

CIL and Section 106 Together

CIL did not replace Section 106 — the two operate side by side. Since the 2019 amendments to the CIL Regulations, the old "Regulation 123" restriction (which capped how many S106 obligations could be pooled toward a single infrastructure project, and required an infrastructure list) has been removed. Authorities can now use both CIL and S106 to fund the same infrastructure, subject to the Regulation 122 tests for S106 (necessary, directly related, and fairly and reasonably related in scale and kind).

In place of the Regulation 123 list, authorities must now publish an annual Infrastructure Funding Statement showing what they expect to fund through CIL and S106 — useful intelligence for developers wanting to understand where contributions go. See our guide to Infrastructure Funding Statements.

For a developer, the practical implication is that you may face both a fixed CIL charge and a negotiated S106 package on the same scheme. Model both in your appraisal from the outset.

What This Means for Tracking

For developers and consultants running multiple schemes, CIL and S106 liabilities accumulate across a portfolio — different authorities, different charging schedules, different instalment timetables, different notice deadlines. Missing a Commencement Notice on one scheme because attention was on another is an avoidable, expensive error.

Keeping a single record of every contribution — the CIL liability, the assumption and commencement dates, the instalment due dates, and the linked S106 obligations — is what stops deadlines slipping through the gaps.

Summary

CIL is a fixed, formula-based charge on new development in England — distinct from the negotiated Section 106 obligation. Liability attaches to the development; assume it early to keep your instalment and relief rights. The charge is the charging-schedule rate times net chargeable floorspace times indexation, with the RICS CIL Index applying to permissions from 1 January 2020. Get the notices in on time — especially the Commencement Notice before work starts — or risk losing instalments, losing reliefs, and incurring surcharges. And remember CIL and S106 now sit alongside each other, often on the same scheme.

Sources

• Community Infrastructure Levy Regulations 2010 (SI 2010/948)
• GOV.UK — Community Infrastructure Levy guidance
• Town and Country Planning Act 1990, Section 106
• RICS — Tender price inflation (CIL Index basis)