CIL lesson – recent appeals decisions

A Commencement Notice must be served where planning permission (including prior approvals through permitted development rights) is granted for a chargeable development. The relevant regulation is Regulation 67 and requires service of the Commencement Notice no later than the day before the date on which the chargeable development is to be commenced.  

The important lesson from the appeal decision APP/R3650/L/25/3365788 dated 18 December 2025, is that the requirement to serve a Commencement Notice is not affected by the fact that the quantum of CIL payable is NIL, in respect of residential annexes, self-build housing, charitable relief and social housing relief (in all other cases where the CIL is nil the development is exempt from serving a Commencement Notice).

The appellant in the above case sought to appeal the calculation of the surcharge for the failure to serve a Commencement Notice before starting works. Even though the CIL due was nil, the calculation of the surcharge is based on the notional CIL for the chargeable development. Per Regulation 83(1), the charging authority can impose a surcharge where development has commenced before receiving a valid Commencement Notice equal to the lower of 20% of the chargeable amount or £2,500. Where there is no CIL payable, the surcharge would be £0.00. However, Regulation 83(1A) addresses circumstances where the CIL charge is nil because it allows the surcharge to be calculated on the lower of 20% of the notional chargeable amount and £2,500 for non-exempted developments as set out above. The notional chargeable amount is the amount of the CIL calculated in accordance with Regulation 40 without taking into account any reliefs. The Inspector therefore found that the charging authority was authorised to impose the surcharge it did and the appeal failed.  

It would be remiss of the writer not to remind readers that in addition to the lesson from this case, the form and content of the Commencement Notice must not be overlooked. Indeed, if it is, the Commencement Notice is not valid and the effect is the same as if one had not been served. A reminder that the relevant form for a Commencement Notice is the Form 6. There have been a number of cases over the years where developers have missed out on reliefs and opened themselves up to surcharges because they have not followed the form and timing requirements set out in Regulation 67.  

A final cautionary point is to remind the reader that a “material operation” as that phrase is defined under Section 56 of the Town and Country Planning Act 1990 will be what triggers commencement for the purposes of CIL. We would therefore caution against any works being carried out before a Commencement Notice has been served. While there have been cases where certain works have been ruled as minor, not amounting to a “material operation”, any preliminary works should be carefully considered to avoid the risks of inadvertently commencing the scheme and having to incur the costs of an appeal to argue the nature of the works.

In a decision dated 27 November 2025 (CIL Appeal 1875822), an appeal was made by the Appellant to the valuation agency under Regulation 114 (contesting the chargeable amount of CIL notified to it by the charging authority). The scheme in this case was a change of use: office unit (Class E) to dwellinghouse (Class C3) and external alterations. The single ground of appeal was that the whole office unit building was in lawful use and should therefore be offset against the chargeable CIL applicable to the dwellinghouse to be constructed, which the Appellant considered would generate no further Gross Internal Area (GIA) resulting in a CIL charge of £0.00.  

The case reminds us of the concepts of what constitutes:

• what constitutes a ‘relevant building’,
• what amounts to ‘lawful use’, and
• the correct approach to calculating Gross Internal Area (GIA) for CIL purposes

To benefit from the deduction of floor space of buildings that exist on land to be developed, deductible floor space includes:

• retained parts of ‘in-use buildings’; and
• for other ‘relevant buildings’, retained parts where the intended use following completion of the chargeable development is a use that is able to be carried on lawfully and permanently without further planning permission in that part on the day before planning permission first permits the chargeable development

This case was concerned with the retention of the in-use building, defined as a relevant building (situated on the relevant land on the day planning permission first permits the chargeable development) which contains a part that has been in lawful use for a continuous period of at least six months within the period of three years ending on the day planning permission first permits the chargeable development (Relevant Period).

The case provides useful insight into the importance of evidence to substantiate lawful use. The appellant in this case had produced various evidence and overall while it was held that some material may suggest the property may have been in use, the decision maker was not satisfied that the evidence met the evidential threshold and commented on some of the evidence as follows:

1. the business rates payments and bank screenshots – records classified the property as empty and not in regular use. Liability for full business rates continues after the initial relief period even where the property remains vacant so this was not sufficient evidence of occupation
2. invoices addressed to the property – these evidence a service is provided but do not in themselves demonstrate occupation/operational use
3. utility bills in this case counted against the appellant as the levels of charges and usage were inconsistent with what would have been expected in terms of consumption of the building of the size involved
4. images were provided of an office set up and whilst these did indicate the presence of furniture, they alone did not confirm occupation operational use

The VA Surveyor agreed with the collecting authority’s assessment that on the objective evidence, continuous use for the relevant period was not established and therefore, under the Regulations, the collecting authority was entitled to consider that there was not sufficient information to enable it to deem that there was an in-use building. The chargeable amount contained within the Liability Notice was held to be correct and the appeal dismissed.  

This case highlights the importance of evidence to establish occupational use and is something to particularly consider in an acquisition of property where the buyer intends to benefit from such a deduction. The evidence of occupation (best demonstrative by licence and lease arrangements or other occupational contractual documents) will be within the seller’s knowledge and it is essential to ensure that contractual obligations are imposed on the seller to ensure that this information is forthcoming at the appropriate time.

It may be prudent in fact to get a statutory declaration on exchange attesting to use which appends robust evidence to demonstrate use and occupation within the Relevant Period. Ideally though, if the purchase must proceed ahead of the CIL liability notice being issued, a retention or guarantee would be provided for the full CIL amount without any deductions, as it is ultimately the collecting authority who decide the issue of acceptability of the evidence (subject to the ability to appeal their decision) regardless of how confident the seller may be that they have satisfied the criteria.

In a series of appeal decisions (1865680, 1865689, 1865692, 1865694) dated 20 October 2025, we are reminded of the importance of correctly evidencing GIA of buildings to be demolished where these buildings are to be taken into account as regards the calculation of CIL. Under the CIL Regulations, buildings that have been in lawful use for the Relevant Period (same period as with buildings to be retained) can be taken into account in the calculation of CIL. 

The scheme in this case was an outline planning permission with multiple phases. The appellant in this case initially submitted a review request (Regulation 113)(following the issue by the collecting authority of liability notices for the various phases within the scheme) because the appellant considered that the collecting authority had failed to make appropriate allowance for the existing residential properties on site (2 cottages) that were scheduled for demolition. The CIL Form 1 was accompanied by an email with measurements from their architects of the cottages and utility bills were also included to demonstrate that the properties were in lawful occupation for the Relevant Period.  

While the collecting authority accepted that the cottages had been in use and indeed accepted the total measurements, the issue arose as the plans submitted evidencing the GIA were not acceptable. The GIA was estimated as opposed to having been undertaken in accordance with the RICS Code of Measuring Practice. The existing buildings were located across two different phases and therefore the need for accurate measurable floorplans was imperative to ensure that any GIA associated with in-use buildings was correctly credited to each phase of the development. In a phased development, each phase is its own standalone chargeable development. The collecting authority concluded that the GIA of the cottages could not be applied as a deduction in the calculation of CIL due to the inaccuracy of the plans and the appellant submitted a series of appeals against the liability notices, on the basis that the cottages’ GIA had not been deducted in the calculation of CIL.  

Under Schedule 1 of the Regulations, the GIA of parts of in-use buildings that are to be demolished before completion of the chargeable development can be deducted from the GIA of the chargeable development. Per paragraph 1(9) of Schedule 1, where the collecting authority does not have sufficient information or information of sufficient quality, to enable it to establish whether any area of a building falls within the definition of ‘in-use building’ then it can deem the GIA of this part to be zero.  

The VA Surveyor in this appeal agreed with the collecting authority as regards the evidence provided by the appellant. Scale plans were requested on multiple occasions by the collecting authority and later by the Appointed Person under the Regulation 113 process. In both cases, the appellant responded by providing the same plan (drafted by the collecting authority) who had stated previously that it was not to scale and could not be relied upon. Per the Regulations, the collecting authority was entitled to determine the GIA as zero.  

The case is a cautionary tale on the importance of adequately evidencing ‘in-use’ deductions when seeking to benefit from demolishing buildings.  Aside from the measurements of GIA, it is important to be able to demonstrate 6 months’ lawful use and often landowners lose large deductions because they are not able to prove this. 

• CIL should be borne in mind for all schemes within charging authorities. Many landowners assume permitted development schemes automatically mean that there is no CIL but this is not correct.  
• Even small-scale schemes can attract significant CIL sums and surcharges if procedural requirements are not adhered to under the CIL Regulations.  
• The above cases demonstrate the importance of having robust evidence.  If you cannot convince the collecting authority with your evidence, then they will be entitled to discount that evidence.  
• Purchasers should ensure that when acquiring a site that they intend to develop, they have factored in CIL considerations where there are existing buildings and they wish to benefit from deductions associated with these and to ensure that contractual obligations are imposed upon the sellers to facilitate the provision of evidence as well as a retention for full CIL amount until the CIL liability notice is issued when the purchase progresses ahead of issue of CIL liability notice.

Joanna Crow is a legal director in the real estate, planning and construction team, advising on a wide range of contentious and non-contentious planning matters.