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CIL payment change warning to developers

27/02/2018

Changes to the way a construction levy is implemented in Shropshire could have wide reaching implications for property developers and landowners, a planning specialist has warned. 

Solicitor Mark Turner, from FBC Manby Bowdler’s Town and Country Planning team, said anyone creating new residential floorspace, including conversions and new builds, needed to understand the changes Shropshire Council has made to the way it handles phased payments for the Community Infrastructure Levy (CIL).

CIL is designed to raise funds towards infrastructure projects across the council area. From the beginning of this month, the authority will only allow CIL payments to be made separately for each phase of the development if the planning permission specifically states that a development is to be phased.

He explained: “Previously, Shropshire Council has taken a more flexible approach, allowing developers to stage CIL payments by submitting reserved matters applications for successive parts of developments, with CIL payments apportioned to each of the phases in alignment with the relevant reserved matters approvals.

“But it has now aligned its approach more closely to the CIL Regulations, and a developer will only benefit from paying CIL in phases if the full or outline planning permission for the scheme expressly identifies those different stages.”

CIL payments can be a significant development cost and are generally payable up-front as soon as the development has started and before any profit is generated, which can impact on cash flow.

Mark said that developers looking to secure staged payments should seek legal advice to ensure their planning applications are correctly submitted, no matter the scale of the development.

“CIL Regulations are extremely complex and are difficult to interpret and apply. Pre-planning preparation will be vital to securing permission for multiple phases, even for small sites. 

 “The front-loaded CIL system can deter landowners from implementing a planning permission. But making a start on work to preserve the permission in place would, without proper phasing in place, trigger the full CIL liability, even in cases where the development cannot proceed straight away due to other constraints.

“People who already have planning permission or who have plans for a development would be advised to seek legal advice to ensure that they don’t end up having to pay out money before they need to.”

For more information regards CIL changes, contact Mark on 01952 208412 or m.turner@fbcmb.co.uk 

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