Appendix 1: Regulation 114 calculation of the chargeable amount
The Valuation Office Agency's (VOA) technical manual for Community Infrastructure Levy.
The following examples are based on the rates of Community Infrastructure Levy (CIL) as below:
Residential development - £50 per square metre (m2) GIA
Office development - £40 per m2 GIA
Industrial development - £30 per m2 GIA
These rates are for illustrative purposes only.
The examples are assumed to take place within a year of the Charging Schedule being adopted unless otherwise indicated.
Example 1
Planning permission for:
2 three bed detached houses and 2 four bed detached houses to be built on a bare site. GIA of chargeable development = 700m2.
CIL calculation:
700m2 @ £50 per m2 = £35,000
Example 2
Planning permission for:
Block of 10 flats (GIA 750m2) and an office building (GIA 1,000m2) to be built on a bare site. GIA of chargeable development = 1,750m2.
CIL calculation:
|
750m2 @ £50 per m2 |
= |
£37,500 |
|
1,000m2 @ £40 per m2 |
= |
£40,000 |
|
Total |
£77,500 |
Example 3
Planning permission for:
4 three bed detached houses with a total GIA of 400m2. To be built on the site of an existing 200m2 GIA bungalow that has been unoccupied for over three years and is to be demolished.
CIL calculation:
400m2 @ £50 per m2 = £20,000
Comment
The GIA of the bungalow cannot be deducted from the GIA of the chargeable development because it has not been in lawful use for a continuous period of 6 months within the period of three years prior to planning permission being granted (regulation 40(11)).
Example 4
Planning permission for:
3 storey office building with a GIA of 500m2. To be built on the site of an existing 200m2 bungalow that has been occupied by an assured short-hold tenant for the past 3 years and is to be demolished.
CIL calculation:
|
Total GIA |
= |
500m2 |
|
Less existing bungalow |
= |
200m2 |
|
Total |
300m2 @ £40 per m2 = £12,000 |
Comment
The GIA of the bungalow is deducted because it has been legally occupied for more than 6 months in the period of three years prior to planning permission being granted (regulation 40(11)).
Example 5
Planning permission for:
Block of 10 flats (GIA 650m2) and an office building (GIA 1,000m2). GIA of chargeable development = 1,650m2. To be built on the site of an existing 500m2 factory that has been occupied by the owner for the past 20 years and is to be demolished.
CIL calculation:
|
Offices |
= |
1,000m2 |
|
|
Less (1,000m2 x 500m2 ) ÷1,650m2 |
= |
303m2 |
|
|
697m2 @ £40 per m2 |
= £27,880 |
|
Flats |
= |
650m2 |
|
|
Less ( 650m2 x 500m2 ) ÷ 1,650m2 |
= |
197m2 |
|
|
453m2 @ £50 per m2 |
= £22,650 |
||
|
Total CIL payment |
= £50,530 |
Comment
The GIA of the factory is deducted, pro rata between the new offices and the new flats, because it has been in lawful use for more than 6 months in the period of three years prior to planning permission being granted (regulation 40(11)).
Example 6
Planning permission for:
An 80m2 single storey extension to an existing detached dwelling.
CIL calculation:
£0
Comment
No CIL is payable as the chargeable development is exempt as ‘minor development‘ because the extension is less than 100m2 exemption limit and it is not a new dwelling (regulation 42).
Example 7
Planning permission for:
A 120m2 two storey extension to an existing detached dwelling.
CIL calculation:-
120m2 @ £50 per m2 = £6,000
Comment
The chargeable development is ‘new build’ that is over the 100m2 ‘minor development’ threshold. The regulation 42 exemption does not therefore apply and the whole area is subject to CIL, not just the 20m2 above the exemption limit.
Example 8
Planning permission for:
The conversion of a multi-storey factory into offices of 500m2 GIA.
The factory has been vacant for 10 years.
CIL calculation:
£0
Comment
There is no ‘new build’ so under regulation 42 (as amended) there should be no CIL liability. The question of whether the existing factory was in lawful use is only relevant if it is necessary to calculate a CIL liability under regulation 40 (either because, in addition to any change of use, there is new build exceeding 100 square metres or the development comprises one or more dwellings).
Example 9
Planning permission for:
Conversion of an office building into a terrace of 5 houses of 500m2 with an extension to give a total GIA of 580m2. The office building has been unoccupied for 3 years.
CIL calculation:
580m2 @ £50 per m2 = £29,000
Comment
The GIA of the converted office building cannot be deducted from the GIA of the chargeable development because it has not been in lawful use for a continuous period of 6 months within the period of three years prior to planning permission being granted.
Example 10
Planning permission for:
Conversion of an office building into 20 flats of 1,000m2, with an extension, to give a total GIA of 1,300m2. The office building has been lawfully occupied for the past 2 years.
CIL calculation:
|
Total GIA |
1,300m2 |
|
Less final GIA of conversion |
1,000m2 |
|
300m2 @ £50 per m2 = £15,000 |
Comment
As the existing building was in lawful use the GIA of the converted office building, post development, but excluding any area within the extension, is deducted from the area of the chargeable development in calculating the liability (regulation 40).
Example 11
Planning permission for:
5 detached houses
GIA of chargeable development = 750m2
Planning permission is granted 18 months after the charging schedule was adopted. The All-in Tender Price Index for year charging schedule took effect was 200. The All-in Tender Price Index for year in which planning permission was granted is 220.
CIL calculation:
750m2 X (£50 per m2 X 220) ÷ 200 = £41,250
Example 12
Planning permission for:
10 detached houses (GIA 2,000m2) and 5 terraced houses (GIA 500m2).
GIA of chargeable development = 2,500m2.
The 5 terraced houses are to be let to a registered social housing provider who will sublet them on assured tenancies.
CIL calculation:
2,500m2 @ £50 per m2 = £125,000
The developer will receive social housing relief and pay no CIL in respect of the sum apportioned under regulation 50 as follows:-
500m2 @ £50 per m2 = £25,000
The developer is liable for the remaining CIL of £125,000 - £25,000 = £100,000.
Example 13
Planning permission for:
30 terraced houses all with a GIA of 80m2 to be built on land forming part of an existing local authority estate. GIA of chargeable development = 2,400m2.
There are 1,000m2 GIA of existing local authority dwellings that had been lawfully occupied for 12 months prior to planning permission being granted that are to be demolished to facilitate the development.
A registered social housing provider owns the site and will let 20 houses (with a total GIA of 1,600m2) on assured tenancies and sell the remaining houses to a private developer for sale on the open market.
CIL calculation:
CIL charge before relief
|
Total GIA |
= |
2,400m2 |
|
less existing houses |
= |
1,000m2 |
|
1,400m2 @ £50 m2 = £70,000 |
The developer will receive social housing relief and pay no CIL in respect of the sum apportioned under regulation 50 as follows:-
N = 1,600m2 – (1,600m2 x 1,000m2/2,400m2) = 667m2
NR = (1,600m2 x 667m2)/1,600m2 = 667m2
Qualifying amount = 667m2 @ £50 per m2 = £33,350
The developer is liable for the remaining CIL of £70,000 - £33,350 = £36.650
Example 14
Planning permission for:
10 new houses with a total GIA of 1,200m2. To be built on the site of an existing factory in lawful use having a GIA of 500m2 or 600m2 if a mezzanine storage area above the ground floor offices is included.
CIL calculation:
a.
|
Total GIA |
= |
1,200m2 |
|
Less existing factory |
= |
500m2 |
|
700m2 @ £50 per m2 = £35,000 |
OR
b.
|
Total GIA |
= |
1,200m2 |
|
Less existing factory |
= |
600m2 |
|
600m2 @ £50 per m2 = £30,000 |
Comments:
GIA is not defined in the regulations but the generally accepted method of calculation is set out in the RICS Code of Measuring Practice 6th Edition (the RICS Code). This requires mezzanine floor areas to be included if they have permanent access.
Whether the floor should be included must be decided on the facts of the case having regard to the evidence submitted by the parties. This evidence may, for example, include copies of valuation or survey reports, photographs, details of the rating assessment etc.
Example 15
Planning permission for:
A block of 20 flats that is to be built on a bare site. The GIA of the whole block including common parts is 1,500m2. The GIA of each individual flat is 60m2, which in total, excluding the common parts, would give a GIA of 1,200m2.
CIL calculation:
a. Total GIA = 1,500m2 @ £50 per m2 = £75,000
OR
b. Total GIA = 1,200m2 @ £50 per m2 = £60,000
Comments
The RICS Code sets out the method of calculating GIA but it does not give guidance on what has to be measured for CIL purposes. As regulation 40 refers to the GIA of ‘the chargeable development’ this is the GIA of the whole block, otherwise the area of the common parts is not included and they clearly form part of the chargeable development.
If, however, the facts of the case having regard to the evidence submitted by the parties indicates common areas should not be considered then this evidence should be assessed and a decision come to. This evidence may include any reference to the assumed basis of measurement that is contained in the charging schedule.
Example 16
Planning permission for:
10 new houses with a GIA of 1,200m2 to be built on the site of an existing factory with a GIA of 700m2 that is to be demolished. The factory has been empty for 2 years apart from a single room that the appellant claims is still used to store office equipment. The collecting authority considers that no part of the building has been in use and that the equipment in the room is simply items that were left by the outgoing tenant 2 years ago.
CIL calculation:
a.
|
Total GIA |
= |
1,200m2 |
|
Less existing factory |
= |
700m2 |
|
500m2 @ £50 per m2 = £25,000 |
OR
b. Total GIA = 1,200m2 @ £50 per m2 = £60,000
Comments
Regulation 40(11) provides that a building is ‘in use’ if ‘a part’ of that building has been in 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. There is nothing in the regulations to indicate that the size of the part occupied should be taken into account. Whether part of a building is ‘in use’ is a question of fact and degree.
Whether the room in this example should be regarded as having been ‘in use’ must be decided on the facts of the case having regard to the evidence submitted by the parties. This evidence may, for example, include details of exactly what was stored in the room, who owned the items, whether the items are of any value, how often the owner or their staff visited the room, whether items were ever removed or added, whether the building or part was treated as occupied for Business Rates etc.
Example 17
Planning permission for:
A 30 storey office building, the basement and 15th floors of which are to be occupied solely by plant and machinery in the form of boilers and air conditioning plant. The GIA of the offices is 14,000m2. The GIA of the plant floors is 1,000m2.
CIL calculation:
Total GIA = 15,000m2 @ £40 per m2 = £600,000
Comments
Regulation 6(2)(b) provides that ‘a building’ into which people go only intermittently for the purposes of inspecting or maintaining fixed plant or machinery is not to be treated as development for the purposes of CIL. As there is nothing in the regulations to suggest that part of a building may be treated as ‘a building’, regulation 6(2)(b) would not seem to apply to floor space that only forms part of a building.
Whether an area into which people go only intermittently for the purposes of inspecting or maintaining fixed plant or machinery comprises ‘a building’ must be decided on the facts of the case having regard to the evidence submitted by the parties. This evidence may include plans, drawings, details of any access or links (e.g. internal doors) between the plant building and other buildings etc.
Example 18
Planning permission for:
A 10 storey mixed use building with offices on the ground to the 4th floors and flats on the 5th to the 9th floors. In addition, there is a 100 space basement car park shared by the office (30 spaces) and flat (70 spaces) occupiers. The GIA of the offices is 6,000m2, the GIA of the flats is 5,000m2 and the GIA of the basement car park is 1,000m2.
CIL calculation:
a.
|
GIA offices |
= |
6,000m2 @ £40 per m2= |
£240,000 |
|
GIA flats |
= |
5,000m2 @ £50 per m2 = |
£250,000 |
|
Total |
£490,000 |
OR
b.
|
GIA offices |
= |
6,000m2 @ £40 per m2 = |
£240,000 |
|
GIA flats |
= |
5,000m2 @ £50 per m2 = |
£250,000 |
|
GIA car park |
= |
1,000m2 |
|
Apportioned as follows: |
|
|
Offices |
|
|
(6,000m2 ÷11,000m2) X 1,000m2 = 545m2 @ £40 per m2 = |
£ 21,800 |
|
Flats |
|
|
(5,000m2 ÷11,000m2) X 1,000m2 = 455m2 @ £50 per m2 = |
£ 22,750 |
|
Total |
£534,550 |
OR
c.
|
GIA offices |
= |
6,000m2 @ £40 per m2 = |
£240,000 |
|
GIA flats |
= |
5,000m2 @ £50 per m2 = |
£250,000 |
|
GIA car park |
= |
1,000m2 |
|
Apportioned as follows: |
|
|
Offices |
|
|
(30 spaces ÷ 100 spaces) X 1,000m2 = 300m2 @ £40 per m2 = |
£ 12,000 |
|
Flats |
|
|
(70 spaces ÷ 100 Spaces) X 1,000m2 = 700m2 @ £50 per m2 = |
£ 35,000 |
|
Total |
£537,000 |
Comments
The RICS Code sets out the method of calculating GIA but it does not give guidance on what has to be measured for CIL purposes. As regulation 40 refers to the GIA of ‘the chargeable development’ this would seem to point to calculating the GIA of the whole block including the area of the basement car park as this clearly forms part of the chargeable development.
Whether the GIA of the chargeable development should include an area occupied by a car park must be decided on the facts of the case having regard to the evidence submitted by the parties. This evidence may include plans, drawings to show the location of the car park and details of the car park access, walls etc, to show whether it forms part of the building.
If it was decided that the area of the car park in this example should be included in the GIA then the CIL charge for the shared car park needs to be apportioned between the part occupied by the flats and the part occupied by the offices. Although it may be intended to allocate the spaces on the basis indicated above, unless this split is specified in the planning permission, this could of course be altered when the building is complete. How the area of the shared car park is apportioned between the two uses must be decided on the facts of the case having regard to the evidence submitted by the parties.