Consultation outcome

Consultation on the Building Safety Levy

Updated 6 January 2023

This was published under the 2019 to 2022 Johnson Conservative government

Applies to England

Scope of the consultation

Topic of this consultation:

This consultation seeks views on the design and calculation of the proposed building safety levy, through which developers will make an important contribution to remedy historical building safety defects.

It covers the following areas:

1. Design of the Levy

2. Levy calculation

3. Potential housing supply impacts

4. Process and timings

5. Incentives and sanctions

6. Reviews and appeals

Geographical scope:

These proposals relate to England only.

Impact assessment:

This consultation seeks views and evidence on the high-level design principles of the building safety levy. An impact assessment will be prepared to support the secondary legislation which will specify the details of the levy.

Basic Information

Body/bodies responsible for the consultation:

Ministry for Housing, Communities and Local Government

Duration:

This consultation will last for 12 weeks from Wednesday 21st July to Friday 15th October.

Enquiries:

For any enquiries about the consultation please contact: HRB.LevyConsultation@communities.gov.uk

How to respond:

Please fill out our digital survey hosted on Citizen Space.

Alternatively, you can email your responses to the questions contained within this consultation directly to: HRB.LevyConsultation@communities.gov.uk

Please make it clear which questions you are responding to.

When you reply, it would be very useful if you confirm whether you are replying as an

individual or submitting an official response on behalf of an organisation and include:

• your name,

• your position (if applicable),

• the name of organisation (if applicable),

• an address (including post-code),

• an email address, and

• a contact telephone number

MHCLG’s Building Safety Levy team would welcome opportunities to engage and facilitate informative surgeries during the12-week consultation process.

If you would like to be included in a consultation meeting, please contact us via the email above preferably before 15 October 2021.

Introduction and background

1. On 10 February 2021, Robert Jenrick, Secretary of State for Housing, Communities and Local Government, announced a Levy on developers seeking permission to construct certain high rise buildings as part of a five-point plan to bring an end to unsafe cladding, provide reassurance to homeowners and support confidence in the housing market:

• The government will pay for the removal of unsafe cladding for leaseholders in all residential buildings 18 metres (7 storeys) and over in England
• A generous finance scheme will be established to support leaseholders in lower rise, lower risk buildings – those between 11 and 18 metres (4 to 6 storeys) – to help pay for cladding removal where it is needed and ensure leaseholders never pay more than £50 a month towards the costs
• An industry levy and a new tax on residential developers, to ensure developers play their part and make a fair contribution
• A new building safety regime to ensure a tragedy like Grenfell never happens again
• Providing confidence to this part of the housing market including lenders and surveyors

2. As part of this intervention, the government has made an unprecedented £5.1 billion commitment to an investment in building safety grants for leaseholders in residential buildings 18 metres and over. This helps to secure a continued market for high-rise residential buildings.

3. The government considers that the housing sector should make a fair contribution to these costs. To help ensure that the industry takes collective responsibility for this, the government is proposing a Building Safety Levy (“the levy”).

4. The powers to create and set the terms of the levy, as the “levy on applications for building control approval in respect of higher-risk buildings,” are set out in the Building Safety Bill - introduced to Parliament on 5 July. Subject to the passage of the Bill through Parliament, this levy will apply to developments in England seeking building control approval from the Building Safety Regulator to start construction of certain buildings: the “Gateway 2” stage of the new building safety regime. The charge will be in addition to fees payable to the Building Safety Regulator to cover their operating costs. Subject to the passage of the Building Safety Bill, we expect the levy to come into force alongside the new Gateway 2 process in 2023.

5. This consultation seeks views on the potential design of the levy, and evidence of possible impacts on housing supply and regeneration, and the housebuilding industry.

The Regulatory and Legislative Framework

6. The Building Safety Bill proposes establishing the Health and Safety Executive as the Building Safety Regulator, to underpin the key regulatory reforms in the new building safety regime. It will provide powers to introduce a more stringent regulatory approvals framework in design and construction for new high-rise residential buildings, care homes, and hospitals which are 18 metres or more in height, or at least seven storeys (“higher-risk buildings”). This includes a new building control process and requirements for higher-risk buildings called Gateways two and three. The Gateway points are stop/go decision points, which will provide rigorous inspection of regulatory requirements to help ensure building safety risks are considered during planning, design and construction. This may include new developments and conversions of existing buildings that result in the creation of a higher-risk building.

7. The Building Safety Bill and proposed draft secondary legislation define higher-risk buildings regulated under the new building control regime as buildings with at least two residential units, care homes or hospitals which are at least 18 metres in height or have at least 7 storeys. A residential unit is defined as a dwelling or any other unit of living accommodation, for example, a room for a residential purpose where basic amenities are shared with others in the building.

8. Higher risk buildings applying for building control approval will be subject to the new levy, unless excluded by regulations.

9. The Building Safety Bill also provides the legislative powers to deliver the levy on these Buildings (“Building Safety Levy”). The basis for the levy and rates will be set in regulations and will apply to certain higher-risk buildings that pass-through Gateway 2 in England each year.

10. There are powers to exclude developments or developers from paying the levy, and to withhold regulatory approval where the levy has not been paid.

11. The levy will be administered and paid to the Secretary of State, or a body designated to undertake these functions. It will be used for the purpose of meeting the government’s building safety expenditure (such as providing assistance for the purpose of removing unsafe cladding).

12. The government recognises that some developers have had limited involvement in the creation of historical building safety defects requiring remediation; and that some who were, have taken independent steps to cover the costs of remediation where applicable.

The new tax on the UK residential property development sector

13. A new tax will be introduced for the UK residential property development sector. A consultation seeking views on the proposed tax was published on 29 April, which stated that the new tax would be introduced in 2022 and it would seek to raise at least £2 billion over a decade and apply to the largest residential property developers. This consultation is due to close on 22 July.

14. The introduction of these measures does not imply responsibility on behalf of historical construction defects in relation to cladding, rather, it ensures that developers make a fair contribution to supporting remediation costs as part of the government’s efforts to protect leaseholders.

15. The Building Safety Levy and the Residential Property Developer Tax, while both securing contributions from the industry, are intended to target different (but sometimes overlapping) sections of the housing sector. This will mean that some developers will pay both the levy on specific developments, and the tax on their profits from these developments; others will pay only the levy, or only the tax.

16. The tax will only apply to the largest residential property developers and aims to raise cumulative revenue of at least £2 billion over a decade. This recognises that the largest developers are operating in a market that will benefit from the substantial amount of funding the government is providing to address building safety defects. The Government has also helped support confidence and liquidity in the residential property market with its recent interventions on Stamp Duty Land Tax and the mortgage guarantee scheme. Therefore, given the government’s significant building safety expenditure, especially associated with the removal of unsafe cladding, the government believes it is right to seek a fair contribution from the largest developers in the residential property development sector to help fund it.

17. The Building Safety Levy will target developers seeking building control approval to start construction of new higher-rise buildings, including conversions which bring an existing building into scope, such as an office to residential conversion, as determined by the new building safety regime. This will recognise that government funding of removal of cladding helps to secure a continued market for the developments levied.

18. The government seeks to understand the impacts of the levy and the tax. The residential property developer tax consultation, which closes on Thursday 22 July, invited early views on the interactions between the tax and the levy. Respondents are encouraged to respond with any further views to this consultation, as soon as possible.

The Infrastructure Levy

19. The Planning for the Future White Paper, published in August 2020, set out the government’s proposed approach to the reform of developer contributions to support provision of infrastructure for new homes. It proposed that the existing parallel regimes for securing developer contributions – namely Section 106 planning obligations and the Community Infrastructure Levy - are replaced with a new, consolidated ‘Infrastructure Levy’.

20. The White Paper set out the government’s aims to ensure developer contributions are:

a. responsive to local needs, to ensure a fairer contribution from developers for local communities so that the right infrastructure and affordable housing is delivered;

b. transparent, so it is clear to existing and new residents what new infrastructure would accompany development and how it would be delivered;

c. consistent and simplified, to remove unnecessary delay and support competition in the housebuilding industry;

d. buoyant, so that when the market is buoyant the benefits are shared fairly between developers and the local community, and when the market is struggling there is no need to re-negotiate agreements.

21. The government envisages that the Infrastructure Levy will be based upon a flat-rate, value-based charge. The White Paper tested whether this should be set at a national, regional, or local level.

22. Other elements of the Infrastructure Levy’s design were outlined in the White Paper. For instance, the inclusion of a value-based minimum threshold below which the levy is not charged, reflecting average build costs per square metre, to prevent low viability development becoming unviable. Where the value of development is below the threshold, no Infrastructure Levy would be charged and where the value of development is above the threshold, the Infrastructure Levy would only be charged on the proportion of the value that exceeded the threshold.

23. Further, the proposed Infrastructure Levy would be charged on the final value of a development (or to an assessment of the sales value where the development is not sold) and be levied on the point of occupation, with prevention of occupation a possible sanction for non-payment.

24. Through the introduction of the Infrastructure Levy, there will be greater certainty for communities and developers regarding the level of developer contributions expected alongside new development.

25. The consultation on Planning for the Future closed on 29 October 2020. Given the significant interest the reforms have generated, we received a large number of responses. We are currently reviewing and analysing these responses and will publish a response in due course setting out our decisions on the proposed way forward, ahead of introducing legislation.

How will the Building Safety Levy and the Infrastructure Levy interact?

26. The levies are designed to target different points in the development cycle for different purposes. The Infrastructure Levy is a long-term reform of existing developer contributions, for the purpose of delivering necessary local infrastructure. The Building Safety Levy will be introduced via Building Safety legislation earlier than the Infrastructure Levy, reflecting the pressing need to remediate historical building safety defects.

27. They will be calculated on a different basis, reflecting the objective measures available at the point at which they are charged.

28. When setting levy rates, we will consider the cumulative impact on development viability of the new Infrastructure Levy, and the Building Safety Levy and other prospective costs to the sector. The government welcomes feedback from stakeholders as to how this interaction can be managed through design and implementation of the Building Safety Levy.

Design of the Building Safety Levy

29. In designing the levy, we will seek to balance raising revenue to support remediation of historical building safety defects and minimising the impact on housing supply, whilst ensuring the impact on developers is appropriate – including avoiding unnecessary complexity or delays for developers.

Who will need to pay the levy?

30. We propose that the levy will apply to developments in England seeking building control approval from the Building Safety Regulator, unless otherwise excluded. The proposed new regime applies to new high-rise residential buildings, care homes, and hospitals which are 18 metres or more in height, or at least seven storeys (“higher-risk buildings”). Building control approval will be required to start construction of certain buildings: the “Gateway 2” stage of the new building safety regime (which may include new developments and conversions of existing buildings that result in the creation of a higher-risk building); or for certain types of building work to existing buildings. We outline potential exclusions below.

31. The powers in the Building Safety Bill allow the Secretary of State to specify who is to pay the levy. We propose to make the Client of a project within scope of the prospective Building Safety Regime responsible for paying, or ensuring payment of, the levy. By “Client” we mean any person or organisation for whom a construction project is carried out, including as part of their business. The Client will have specific functions as a duty holder within the strengthened regulatory system to be provided for by the Building Safety Bill. We consider that as the Client holds responsibility for the construction project, they should also be responsible for payment of the levy. Draft Regulations on the responsibilities of duty holders in construction have been published alongside the Building Safety Bill.

32. The Client may be a company or an individual and may also be the Principal Designer and/or Principal Contractor. If the Client changes with levy payments outstanding, then we propose that the new Client would take on responsibility for these payments.

Q1: Do you agree that the Client should be responsible for paying, or ensuring payment of, the levy?

Please let us know of any alternative proposals you consider to be better, and why, or any other factors we should take into account.

Exclusions from the levy

33. The Building Safety Bill includes powers to exclude specified developers and developments from payment of the levy. Any exclusion potentially reduces the revenue that the levy can raise and risks complexity and market distortions. However, exclusions may be necessary to protect some types of housing supply or other social objectives.

34. This section sets out exclusions that the government may consider and seeks views on the impacts of applying the levy to these developments, the approach to delivering any potential exclusion, and on potential market impacts:

Affordable Housing

35. The government proposes to exclude affordable housing from levy charges. This is intended to mitigate the impact of the levy on the development of affordable housing, including through the government’s Affordable Homes Programme. This exclusion would also apply to affordable homes contributed as a requirement of planning permission process.

36. Applying a levy to affordable housing would increase the cost of developing affordable housing and disincentivise supply. The most probable impact would be an overall reduction in the number of affordable homes delivered.

37. The National Planning Policy Framework defines ‘affordable’ housing as ‘Housing for sale or rent, for those whose needs are not met by the market (including housing that provides a subsidised route to home ownership and/or is for essential local workers)’. This covers several housing types, broadly:

a. Affordable housing for rent, that is at least 20% below local market rents;

b. Discounted market sales housing, that is sold at a discount of at least 20% below local market value;

c. Other affordable routes to home ownership (e.g. shared ownership, relevant equity loans, low-cost homes, rent to buy).

Q2: Do you agree that affordable housing should be excluded from levy charges? Please explain.

Call for evidence (A): The government would welcome views and evidence on the potential impacts of either applying the levy to affordable housing or excluding affordable housing from the levy; on how an exclusion for affordable housing might be delivered (including how the levy might be administered for mixed-purpose developments incorporating some affordable housing); on potential market impacts; and on how these impacts and potential “gaming” might be mitigated.

Hospitals

38. Hospitals over 18 metres/ 7 storeys are in the scope of the new building safety regime, but the government proposes to exclude hospitals from paying the levy, so as not to add costs to the health sector.

Q3: Do you agree that hospitals should be excluded from paying the levy?

Q4: Are there any other categories of development or developer that should be excluded from the levy? Please explain why you think this and your views on market impacts.

Small and Medium-sized Enterprises

39. Although it is not the government’s intention to exclude Small and Medium-sized Enterprises (SMEs) from paying the levy, we would welcome views on how the design of the levy might protect SMEs, for example through the ability to agree payment schedules if a SME could not pay the levy in full upfront.

40. A payment schedule might work by requiring a percentage payment at the time of the Gateway 2 application, but with a further payment or payments at set later dates. For transparency and simplicity in administration, it would likely need to operate on a formulaic basis (rather than bespoke to individual project financing).

41. If payments under the schedule were not met, then sign off at Gateway 3 would not be granted. However, in designing the payment schedule we would want to ensure that it did not create an incentive to postpone payment until Gateway 3 (see section on Incentives and sanctions).

Q5: Would the ability to agree payment schedules support SMEs?

Q6: Are there other measures that would support SMEs paying the levy?

Refurbishment

42. The government is minded to exclude refurbishments that require building control approval from the levy. Levying refurbishments would be a barrier to landlords maintaining the quality and safety of existing dwellings, and for leasehold properties would be likely charged back to leaseholders. This is not the intention of this policy.

Q7: Do you agree that refurbishments should be excluded from the levy? Are there any types of refurbishments that you consider should be captured and should pay the levy?

Levy calculation

43. In designing this levy, the government is mindful that the levy calculation needs to be transparent, simple and objective to allow the financing of the project to be properly planned for, and to support the efficient administration of the levy. Gateway 2 will occur after the planning process, when building control approval is sought for building work to commence; Gateway 3 will be on completion of building work and building control approval will be needed before a building can be registered for occupation to commence. The levy will be aligned with these regulatory stages, and therefore, the approach to calculating the levy needs to reflect these points in the development cycle.

44. The government is seeking views on two options for the basis for calculating the levy, either:

• a charge per square metre of the entire internal floor area, subject to certain exclusions, or

• a fee per residential unit in scope of the levy.

44. The rates for either approach could be varied to reflect disparities in property value, for example based on geographical location. We would seek to ensure this was transparent, for example by publishing a schedule of rates for different areas.

45. If we implement Payment Schedules, or a levy adjustment later in the development build, it may be that different rates or charges may apply – see sections 40-42 above.

46. The government will make a decision on the eventual levy rate, informed by the evidence received from this consultation, and balancing revenue raised with potential impacts on housing supply. The levy rate will be set out in regulations and may be varied over time.

Q8: Which option do you think provides the most transparent, simple and objective basis for the levy: floor area or per residential unit? Why?

Q9: Would documentation required for building control approval at Gateway 2 provide accurate evidence of this basis?

Q10: Do you have an alternative proposal as a basis for the levy? If so, please explain why you consider it better.

Q11: Do you agree that the levy rate should be varied depending on location, to reflect differing property values? Please indicate any suitable examples of doing so.

Call for evidence (B): To support the government’s eventual decision on the levy funding level and payment mechanisms, we would welcome further information from those potentially subject to the levy covering:

- An overview of typical cashflow over the lifecycle of a higher-rise residential building project

- How higher-rise building projects are structured in terms of company structures/ Special Purpose Vehicles/ Joint Ventures

- How many “Clients” (as per definition in Building Safety Bill) are also Small or Medium Size Enterprises under the usual definition SMEs (as businesses with between one and 249 employees).

Potential housing supply impacts

48. For the period that the levy is in place it will be an additional cost to developers, and may have an impact on their activity. This will be in addition to other prospective costs to the sector, and in making a decision on the final levy rate, the government will consider the potential cumulative impacts.

49. This section sets out early thinking and analysis on the impacts of the levy for developers and for the supply of residential buildings of 7 storeys/18m and above. We would welcome views and evidence/data from the industry, local authorities and other interested stakeholders on this section.

50. While ensuring that the fundamental objective to raise revenue is met, the government is keen to ensure that the levy is designed in a way which minimises the impact on housing supply. Increasing housing supply is a priority for the government. The impact that the levy would have on the build-out rate of housing is uncertain, and it would depend on the final design of the levy and the behavioural responses of developers and landowners, in the context of the overall economic and policy environment. If the levy excludes social housing, we estimate that there may be c.200 developments (c.12,000-14,000 housing units) subject to the charge per year. This is a small fraction of annual housing supply. A large proportion of residential property developers would therefore be unaffected.

Call for evidence (C): We would welcome information from developers, local authorities, housing associations, and other interested parties on the characteristics of residential new buildings of 7 storeys / 18m and over which are expected to go through Gateway 2 approvalto come forward over the next ten years (to the extent foreseeable). We attach a pro-forma at Annex A to assist with this exercise.

The levy would increase costs for those developers who have to pay it, and our hypothesis is that these costs will be passed onto the buyer where the market can sustain this.

• Developers may factor the increased cost into the price they are willing to pay for new sites, which - depending on the levy cost - may result in a reduced number of plots viable for development, with a subsequent impact on completions.
• At the margin, some developers may also bring forward development, so it is completed ahead of the levy being introduced, to avoid the levy.
• After the levy has been introduced, there is a risk the increased cost may dissuade some housebuilders from building out some sites they already own, where the trade-off between risk and return is already finely balanced, until house prices have risen sufficiently to compensate for the levy.

51. The observed behaviour of home builders at a local level suggests that for non-marginal sites, ^{[footnote 1]} local housing market considerations are the most important factor when it comes to development decisions. That is, build out rates are driven by judgments on the extent to which housing supply can be increased, through new build homes, without causing a reduction in local house prices (the ‘absorption rate’). This suggests that fluctuations associated with the cost of construction may be comparatively less important. Therefore, the levy may not have a significant impact on build out rates.

52. In response to the levy, developers could also change development characteristics, such as seeking to increase development density, to either increase or decrease the size of the development, or to reduce build costs. Developers may also seek to reduce local infrastructure and affordable housing contributions through the planning process.

53. Given possible differences in behavioural responses and the small number of developers the levy will target, estimates of the potential impact of the levy on housing need insights from those directly affected. The government would like views and evidence on how developers in scope of the levy are likely to respond, in particular:

Q12: In seeking to balance revenue generation from the levy and impacts on housing supply, we would welcome views on the levy rate (as a percentage of property value) which would impact viability of housing supply – differentiating between different geographical locations and also property values if possible.

Q13: How might developers seek to mitigate the impacts of a levy – including adjusting development plans, build out strategy, land acquisition strategy and pricing?

Q14: Is there anything further the government might want to consider in relation to the design of the levy which would help minimise the impact on housing supply?

Q15: Do you consider that the levy would have any impacts on local regeneration schemes? At what rate (as a percentage of market property value) would that impact be seen?

Process and timings

54. The government aims to make the levy as transparent and simple to pay and administer as possible. We anticipate a self-assessment system for the levy, supported by documentation provided by developers, which will then be reviewed, by a collection authority, before building control approval is granted by the Building Safety Regulator.

55. Developers within scope of the Building Safety Levy will also be required to retain their own records and evidence.

56. If payment schedules are used to help manage the impacts of levy payments, it may be that it is the first payment and commitment to the payment schedule that is required at Gateway 2.

57. Subject to final design questions, it may be that a levy-adjustment will be required at Gateway 3, again subject to a self-assessment.

58.The list below explains the three Gateways proposed in the new building safety regime for higher risk buildings:

Gateway 1

The planning application stage

Gateway 2

The building control application to the Building Safety Regulator, before building work can start (current building control deposit of plans stage)

Gateway 3

Building control application to the Building Safety Regulator when building work is completed, before a building can be occupied (current building control completion stage)

59. The Building Safety Regulator will need to determine building control applications at Gateway 2 within 12 weeks, and we expect the levy process to take place within that timescale, except where a review or appeal occurs.

60. We have not yet made a final decision on which body will administer and collect the levy on behalf of the Secretary of State for Housing, Communities and Local Government. This decision will take into account the costs and complexity to industry and to government in administering the levy.

Q16: Do you anticipate any issues with a self-assessment and payment system alongside the Gateway approvals process, and how might these be addressed?

Q17: How might a payment schedule system be implemented?

Incentives and sanctions

61. The government intends the principal sanction for non-payment of the levy to be withholding of building control approval by the Building Safety Regulator to prevent building work commencing. Depending on when the payment is due (see “Process and Timings” section) this may be at Gateway 2 approval or as per a payment schedule. This means that if the levy is not paid, the developer will not be able to progress construction or completion.

62. As set out above, we intend the levy to be set on the basis of a clear and simple calculation, supporting a self-assessment that can be verified by the Collection Agent. The government intends to design these arrangements with the right incentives to support the efficient and fair operation of the levy. We wish to minimise or avoid distorting the normal development and delivery of these projects.

63. In this section we are seeking views on how the levy may be designed with positive incentives to minimise issues, and on the circumstances in which sanctions may apply and what these should be. We also cite some examples of sanctions that work effectively in other contexts. Some of these incentives or sanctions may require additional legislative powers to those set out in the Building Safety Bill – such as the imposition of a fine. We seek views on the following potential issues:

What?	Examples of sanctions:
Mistake in calculation The government seeks views on how mistakes in the levy self-assessment could be minimised and penalised where necessary	Her Majesty’s Revenue and Customs’ Penalties for Careless Mistakes: in cases of ‘unprompted disclosure’ HMRC will charge 0% to 30% of potential lost revenue as a penalty. This rises to 15 to 30% when HMRC has discovered the error themselves and confronted the taxpayer about it. For ‘deliberate errors’, penalties can range from 20% to 100% of potential lost revenue HMRC will consider reduced penalties where a taxpayer makes an ‘unprompted disclosure’.
Failure to assume liability For the levy, the project has either not progressed through the higher-risk building control process, and so wider sanctions and enforcement will apply; or else the development is within the Building Safety regulatory system, and will fail to secure its building control approval due to non-payment of the levy. In the first instance, we are seeking views on what levy penalty could apply	HMRC treat FTN (failure to notify) i.e. 20%-100% penalty, with possible reductions for unprompted disclosure.
Gaming The levy design could give rise to opportunities to structure a project to minimise, delay or avoid levy payments. For example, an artificial incentive to change and finalise plans later in the process that might previously be the case, to delay levy fees	Final review and adjustments at Gateway 3.
Missed payment (payment schedule)	HMRC charge 2.60% of the missed payment per day late, plus a sliding scale of penalties that get bigger for repeated missed payments, up to 15% of the unpaid amount for a sixth missed payment.
Fraud	For fraud (evasion), HMRC can charge penalties up to 200% of the tax lost, subject to a reduction for good behaviour during the disclosure process. For the worst cases, prosecution should be an option.

64. We expect there will be a range of approaches to sanctions, depending on the level of culpability in a particular case – for example, a genuine calculation error is likely to attract a lower level of sanction than a deliberate and calculated attempt to evade all or part of the levy.

Q18: Do you anticipate that these, or other issues, may occur in operation of the levy? Please provide examples.

Q19: How might levy design avoid mistakes, gaming and fraud, or else maximise positive incentives?

65. Where it is not possible to avoid such issues, we may apply further sanctions or penalties, such as surcharges or interest rates (which may require additional powers in the Building Safety Bill).

Q20: In what circumstances do you think penalties or surcharges would be necessary, and how might these be applied? Please provide examples.

Reviews and appeals

66. In designing the levy, the Government intends to minimise the potential for disputes between the collection agent and the person responsible for paying the levy. Where these do arise, we propose that the persons who are responsible for paying the levy are able to address disputes by requesting a review of the decision by the collection agent and, where a dispute remains, the person responsible for payment should be able to seek a determination from the First Tier Tribunal.

Decisions that may be subject to a review/appeal:

• determinations on levy adjustments following self-assessments
• determination of exclusions
• imposition of sanctions

Q21: Are there any other issues that could give rise to disputes in relation to the levy?

Review by the Collection Agency

67.In the first instance, we propose that the person responsible for paying the levy will be able to apply to the collection agency for an internal review of the decision. We propose that the period to request a review should be 21 days from the date of the decision.

Appeal to the First Tier Tribunal

68.The government proposes that where the applicant has exhausted the review process and is still not satisfied, they should be able to appeal to the Property Chamber of the First-Tier Tribunal (FTT).

69. This tribunal deals with a range of appeals relating to disputes over property and land, and the appeal would be a formal judicial hearing, administered by HM Courts and Tribunal Service. We propose that an appeal may be lodged on the following grounds:

• that the decision was based on an error of fact;
• that the decision was wrong in law;
• that the decision was unreasonable.

The tribunal would have the powers to confirm, vary or reverse the decision on the levy. If the applicant is still not satisfied with the tribunal’s decision, they can appeal to the Upper Tribunal, and if still not satisfied, cases can go to the Court of Appeal and then the Supreme Court. The process is set out in Tribunal rules.

Q22: Do you agree that the approach to resolving disputes outlined in paragraphs 67 to 69 is appropriate? Are there other decisions in the operation of the levy that you consider merit a review and appeal route, and why?

Annex A

Consultation on Building Levy pro-forma (Word version) Consultation on Building Levy pro-forma (Open document version)

About this consultation

This consultation document and consultation process have been planned to adhere to the Consultation Principles issued by the Cabinet Office.

Representative groups are asked to give a summary of the people and organisations they represent, and where relevant who else they have consulted in reaching their conclusions when they respond.

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Your personal data is being collected as an essential part of the consultation process, so that we can contact you regarding your response and for statistical purposes. We may also use it to contact you about related matters.

3. Our legal basis for processing your personal data

The collection of your personal data is lawful under article 6(1)(e) of the UK General Data Protection Regulation as it is necessary for the performance by MHCLG of a task in the public interest/in the exercise of official authority vested in the data controller. Section 8(d) of the Data Protection Act 2018 states that this will include processing of personal data that is necessary for the exercise of a function of the Crown, a Minister of the Crown or a government department i.e. in this case a consultation.

4. With whom we will be sharing your personal data

MHCLG may appoint a ‘data processor’, acting on behalf of the department and under our instruction, to help analyse the responses to this consultation. Where we do we will ensure that the processing of your personal data remains in strict accordance with the requirements of the data protection legislation.

5. For how long we will keep your personal data, or criteria used to determine the retention period.

Your personal data will be held for two years from the closure of the consultation

6. Your rights, e.g. access, rectification, restriction, objection

The data we are collecting is your personal data, and you have considerable say over what happens to it. You have the right:

a. to see what data we have about you

b. to ask us to stop using your data, but keep it on record

c. to ask to have your data corrected if it is incorrect or incomplete

d. to object to our use of your personal data in certain circumstances

e. to lodge a complaint with the independent Information Commissioner (ICO) if you think we are not handling your data fairly or in accordance with the law. You can contact the ICO at https://ico.org.uk/, or telephone 0303 123 1113.

Please contact us at the following address if you wish to exercise the rights listed above, except the right to lodge a complaint with the ICO: dataprotection@communities.gov.uk or Knowledge and Information Access Team, Ministry of Housing, Communities and Local Government, Fry Building, 2 Marsham Street, London SW1P 4DF.

7. Your personal data will not be sent overseas.

Note that this cannot be claimed if using certain web-based services where servers may be based in the EU, U.S. or elsewhere. In that case, you must ensure that the system in use has appropriate protection and that you have taken all precautions necessary to protect the data, and must make this clear. Note that Citizen Space data is stored in the UK.

8. Your personal data will not be used for any automated decision making.

9. Your personal data will be stored in a secure government IT system.

We use a third-party system, Citizen Space, to collect consultation responses. In the first instance your personal data will be stored on their secure UK-based server. Your personal data will be transferred to our secure government IT system as soon as possible, and it will be stored there for two years before it is deleted.

1. “Marginal land” is land with little to no agricultural or commercial value. ↩