Don't Look Back in Anger: A quick word on CIL and Retrospective Planning Permissions
At the end of April, DLUHC updated the national planning policy guidance on CIL.
The revised guidance now includes two new paragraphs (paragraphs 47a and 47b) clarifying how obtaining a retrospective planning permission impacts the availability of CIL exemptions and reliefs.
The new paragraphs read as follows:
"Are reliefs or exemptions available for developments granted retrospective planning permission under section 73A of the Town and Country Planning Act 1990?
It is important to note that developments consented through retrospective permissions granted under section 73A of the Town and Country Planning Act 1990 are not able to obtain relief or exemption from the levy (other than the minor development exemption). This is because any relief or exemption must be granted, and notification provided by the collecting authority of the grant of that relief or exemption, prior to commencement of the development. Section 73A permissions are deemed, for CIL purposes, to have commenced at the point planning permission is granted.
Paragraph: 047a Reference ID: 25-047a-20240426
Can developments previously in receipt of a relief or exemption from the levy retain or revise their relief or exemption when the development is subsequently altered through a section 73A planning permission?
Developments consented retrospectively through a section 73A permission are not able to obtain relief or exemption from the levy (other than the minor development exemption), including when the s73A permission in effect replaces a previous permission which had been subject to a relief or exemption. The previously obtained exemption is not carried over to development consented through a section 73A permission, nor can a new exemption in respect of the section 73A permission be obtained.
Developers (including, in particular, self-builders) and local authority planning officers should therefore be aware of the potential consequences for CIL liability when a previously consented development, benefitting from a CIL relief or exemption, is carried out in breach of planning permission to the extent that retrospective planning permission under section 73A (which would be incapable of obtaining a relief or exemption) to regularise the breach, is subsequently considered.
Local planning authorities and developers may, before a decision is made as to how a breach of planning permission should be rectified, wish to discuss the CIL position and how this might change if a retrospective planning permission under section 73A is granted.
Paragraph: 047b Reference ID: 25-047b-20240426"
This guidance does not change anything. This is how the CIL regime has always worked. It is, however, also not a complete picture.
There are other CIL implications of obtaining a retrospective planning permission that need to be taken into account, and this post explores two of them.
1. The effect of a retrospective consent on demolition discounts
A retrospective planning permission can result in the loss of more than just your eligibility for a CIL Relief or Exemption that you might otherwise have been entitled to apply for. In a large number of cases, it may also result in the loss of any demolition discount or credit that was applied to the original consent.
The reason for this is in the wording of the relevant parts of paragraph 1 of Schedule 1 to the CIL Regulations.
Schedule 1, Para 1(6) allows a deduction from floorspace that is liable to CIL for “the gross internal areas of parts of in-use buildings that are to be demolished before completion of the chargeable development”.
Schedule 1, Para 1(10) contains the following definitions:
"in-use building" means a building which—
(i) is a relevant building, and
(ii) 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 building" means a building which is situated on the relevant land on the day planning permission first permits the chargeable development"
These definitions pose a number of difficulties for retrospective planning permissions:
- Firstly, as the development has already taken place before the permission was granted, any buildings that previously qualified for a demolition discount would have already been demolished by the time that the retrospective consent had been granted. As a result, those buildings would no longer qualify as “relevant buildings” as they were not situated on the relevant land on the day that the permission first permits development; and
- Secondly, depending on the timing of the retrospective consent, there is a good chance that by the time the consent was granted, the building would also have fallen out of the relevant ‘lawful use’ period - as this is calculated backwards from the day that the retrospective consent ‘first permits development’ (which is usually the day on which the permission is granted'.
Whilst there are provisions that allow demolition discounts to be moved between permissions in certain circumstances, through the abatement process (see reg 74A and reg 74B of the CIL Regulations), they are of very limited use when dealing with retrospective consents.
This is because it is a requirement of Reg 74B of the CIL regulations (which deals with abatement between completely different planning permissions - as opposed to s.73 consents) that an application for abatement of the CIL Liability needs to be made before the second planning permission has been implemented.
This is clearly a problem for retrospective permissions, as the permission is deemed to be implemented when it is granted, meaning that there is no time to make an abatement application under Reg 74B.
2. The effect of retrospective consents on the ability to appeal an incorrect CIL calculation.
The one sliver of a silver lining in this whole, remarkably dark and stormy, affair relates to appeals to the VOA against incorrect CIL calculations.
These appeals are still possible when it comes to retrospective consents. Something that has recently been confirmed in a VOA Appeal Decision that can be accessed here.
The facts of the VOA Appeal are relatively straightforward and are set out in the decision - so I won't go into them in detail. The headlines, however, are as follows:
- A developer obtained a planning permission to convert a former chapel into residential dwellings - an application which included some demolition work to an extension to the chapel.
- Whilst the application was in progress the developer undertook repair works to the chapel which including demolishing the extension. Once the permission was granted, however, the developer decided not to complete the conversion. Instead the chapel was kept in its previous use.
- There was then a lot of arguing about a) whether the permission had actually been implemented, or whether the demolition related to something else entirely and b) whether the CIL calculation levied by the Council was correct. Two separate appeals were lodged, one against the surcharges and the deemed commencement date and one against the calculation of the chargeable amount (as the chapel was in lawful use at the time the permission was granted).
- The developer lost the appeal against the deemed commencement date but won the appeal against the chargeable amount.
The decision is worth reading in full, but I have set some key extracts out below:
"10. The CA has not directly responded to this ground within their submitted
representations. However, they have provided us with the representations that they submitted as part of the PI appeal, in which they opined that the chargeable development commenced on the ---------. It is noted that the CA within their email of the ---------, refused a Regulation 113 appeal under (9) (b) of that Regulation, stating that the appeal was invalid given the development had already commenced.
11. Whilst the PI’s appeal decision relates to the deemed commencement date stated in the demand notice, the decision clearly states that the subject permission is retrospective with --------- stating, “As the works took place before permission was granted, it follows that permission was effectively granted retrospectively.” Furthermore, having read the appellant’s representations, I agree, demolition works did take place prior to planning permission being granted on ---------. Given this permission is retrospective, an appeal in relation to the chargeable amount is permitted under Regulation 114 (3A) “A person may appeal under this regulation
after the relevant development has been commenced if planning permission was granted in relation to that development after it was commenced”. Here the deemed commencement date for the purpose of the demand notice has been decided as --------- but it is clear that the planning permission in question was granted after the relevant development was commenced. There is no mention of the deemed commencement date in this regulation. I therefore find this appeal valid and consequently, I will consider the appellant’s view that the chargeable amount in ---------is incorrect with the CA failing to deduct the existing floorspace."
"14. “Relevant building” means a building which is situated on the “relevant land” on the day planning permission first permits the chargeable development. “Relevant land” is “the land to which the planning permission relates.”
15. As stated above, to qualify as a ‘in use building’, the building must be situated on the relevant land on the day planning permission was granted. It is clear from the appellant’s submissions that the --------- sq. m extension was demolished before the --- ------. As a result, the area of this part of the existing building cannot be netted off from the GIA of the chargeable development. I do however consider the remainder of the building to have satisfied this criterion.
16. The second criteria to be met to qualify as an “in-use building”, is that the property must contain a part that has been in lawful continuous use for at least six months ending on the day planning permission first permits development. The appellant has provided a number of witness statements that support regular use of the premises dating from 2019 to present day with fitness classes and other services being delivered most days on a weekly basis. The property, as a former chapel, historically would have had D1 planning permission under the Town and Country Planning (Use Classes) Order 1987. Amendments have been made to the 1987 Use Classes Order and with effect from the 01 September 2020, Class D1 was absorbed into the new Use Class E – Commercial, Business and Service. The uses described by the appellant fall within the sub sections of Class E outlined below;
- E (d) Indoor sport, recreation or fitness (not involving motorised vehicles or firearms)
- E (e) Provision of medical or health services (except the use of premises attached to the residence of the consultant or practitioner)
- E (f) Creche, day nursery or day centre (not including a residential use)
- E (g) Uses which can be carried out in a residential area without detriment to its amenity:
Therefore, I consider that the appellant has demonstrated that the use of the building was both lawful and continuous for the qualifying period and aside from the area of the demolished extension, I conclude that the GIA of the former chapel can be offset against the new chargeable development"
In Summary
Retrospective consents remain a very expensive option of last resort for CIL purposes. They do not, however, mean that you are completely without recourse if, for some reason, the CIL calculation itself is incorrect. Whilst the benefit of many exemptions, reliefs and floorspace discounts will be lost as a result of obtaining a retrospective consent, it is still possible to correct errors in the calculation itself - whether they relate to indexation, floorspace errors or other mistakes in the liability notice.
Are reliefs or exemptions available for developments granted retrospective planning permission under section 73A of the Town and Country Planning Act 1990?
It is important to note that developments consented through retrospective permissions granted under section 73A of the Town and Country Planning Act 1990 are not able to obtain relief or exemption from the levy (other than the minor development exemption). This is because any relief or exemption must be granted, and notification provided by the collecting authority of the grant of that relief or exemption, prior to commencement of the development. Section 73A permissions are deemed, for CIL purposes, to have commenced at the point planning permission is granted.
Paragraph: 047a Reference ID: 25-047a-20240426”
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