Self-build exemption from Community Infrastructure Levy does not apply to retrospective planning permissions: Court of Appeal

In the recent case of Gardiner v Hertsmere Borough Council [2022] EWCA Civ 1162 the Court of Appeal confirmed that the self-build exemption from liability to pay the Community Infrastructure Levy (“CIL”) is not available where planning permission is granted retrospectively under section 73A of the Town and Country Planning Act 1990. The decision has wider implications for other exemptions and reliefs from CIL.

Mr Gardiner had secured planning permission for the partial demolition of his bungalow in Radlett and the construction of an extension to it. However, the works carried out went beyond the scope of that permission, requiring him to make another application for retrospective planning permission for the construction of a new six-bedroom dwelling under section 73A.

Hertsmere Borough Council, as collecting authority for CIL in the area, refused his claim for the self-build housing exemption and demanded a payment of CIL amounting to £118,227.62.

The High Court dismissed a claim for judicial review of the Council’s decision based largely on the interpretation of regulation 54A and 54B of the CIL Regulations 2010 governing the exemption for self-building housing.

The court emphasised that a claim for the self-build housing exemption must be made by a person who “intends to build, or commission the building of, a new dwelling.” Those words, they said, are “forward looking” and “not consistent with an application being made by a person who has already built or begun to build a dwelling”.

In addition, the claim must be made by someone who has assumed liability to pay CIL before the development begins. The regulations do not allow someone to assume liability for CIL until a chargeable development exists. This only arises when planning permission has been granted.

Where planning permission is granted under s73A, the development is treated as commencing on the day the permission is granted. The effect of this is that there is no gap between the grant or permission and the commencement of development in which “liability can be assumed for the chargeable development as a prerequisite to the claim for an exemption.”

Mr Gardiner appealed against the court’s findings and the Court of Appeal agreed that, on the correct construction of the legislation, the self-build housing exemption was plainly not available.

The Court of Appeal reiterated that under the statutory scheme it is only if planning permission is granted for a chargeable development that liability for CIL can be assumed, the amount of that liability duly calculated, and the availability of any exemption ascertained.

For retrospective grants of planning permission, there is no interval between the time when planning permission is granted and the time when development is treated as having commenced. There is no period in which someone who seeks to claim the self-build housing exemption from CIL can effectively assume liability for CIL.

The court added that there is “a credible policy aim to be served by ensuring that a claim for exemption from CIL would not be available where development had been begun without the benefit of the planning permission it required”. It might discourage breaches of planning control, but it would neither remove nor weaken the incentive for self-build housing development, which it was the purpose of the exemption to create.

It follows that, under the relevant provisions in the statutory scheme, other relief such as charitable and social housing relief will not extend to development that has been authorised by a retrospective planning permission.

This creates a real problem for those looking to rely on these exemptions where it becomes necessary to apply for retrospective planning permission during the course of a development to regularise works already carried out.

Those looking to rely on these exemptions or reliefs should therefore ensure that works are carried out fully in accordance with a prospectively granted planning permission, and that they assume liability for CIL, and claim their exemption, before they start work.