After an absence, the tradition of new year Community Infrastructure Levy Amendment Regulations is back in the form of the draft Community Infrastructure Levy (Amendment) Regulations 2018, published on 14 December 2017.
The amendments are another sticking plaster ahead of a full overhaul of the CIL Regulations, this time to deal with difficulties that some authorities had got into on the application of indexation to CIL charges for S73 permissions.
Section 73 so simple
If a S73 permission is granted where no CIL charging schedule was in place at the time of the original permission, the CIL Regulations are intended to only charge the 'top up' change in CIL. That is entirely clear from Ministerial statements in the run up to the implementation of the Community Infrastructure Levy (Amendment) Regulations 2012 which introduced the regulation 128A regime (and various other changes) for such transitional cases.
A quirk of the drafting meant that – taken in an inappropriately literal way – the difference between indexation values for the original and the S73 consents would result a charge based on the application of the indexation change across the whole of the consented floorspace. So, for example, a S73 permission that in floorspace terms should have either zero, negative or minimal change in CIL chargeable value was being treated as having a charge relating solely to indexation change.
The Valuation Office rejected that approach on an appeal against the resulting chargeable amount in March 2017, which remains subject to stayed judicial review claim by the collecting authority.
The amendment regulations now address this point by clarifying that the same indexation base value should be used for working out the chargeable value of each consent.
Although they will only come into effect later this winter, the Explanatory Memorandum states that they are clarificatory.
What lies beneath
That is important, because the 'fix' is partial and does not address all the mischief in the Regulations for S73 applications. By making it clear that the changes are 'clarificatory' we now know the Government agrees with the common sense interpretation of the Regulations the Valuation Office Agency has taken on appeal.
The Government should be commended for having listened and acted wisely. They should now make a habit of that on CIL – our next blog will include our New Year's wish list for simplifying CIL.
In the meantime real care is still needed when dealing with S73 applications, indexation and abatement applications.
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