The COVID-19 pandemic is causing strain on every aspect of society and we are unlikely to revert back to the ‘norm’ in the immediate future. Adapting to this unprecedented time will be key to ensure business runs as smoothly as possible. Our previous insight identified the key struggles the planning world is facing and there has since been an update to the Community Infrastructure Levy (CIL). We explore the key changes and what this means for registered providers.

The update to the Community Infrastructure Levy Regulations 2010

Today, 13 May 2020, the government has announced that they propose to amend the Community Infrastructure Levy Regulations 2010 in due course to give authorities (both charging and collecting authorities) more discretion to defer payment for small and medium sized developers without having to impose additional costs on them during the COVID-19 outbreak.

These changes will apply to developers that have an annual turnover of less than £45 million.

What changes will be made?

The government will introduce amendments to enable authorities to:

• defer payments;
• temporarily dis-apply late payment interest; and
• provide a discretion to return interest already charged where they consider it appropriate to do so. This may include interest that has accrued in the period between the introduction of the lockdown and the regulatory changes coming into effect.

These changes will not be open-ended and will be removed once the economic situation has recovered.

When will these changes take effect?

This is unknown as amendments will require debate in Parliament. However, existing flexibilities and the government’s clear intention to legislate should give authorities confidence to use their enforcement powers with discretion and provide some comfort to developers that, where appropriate, they will not be charged extra for matters that were outside of their control.

Until such amendment regulations are able to take effect authorities are encouraged to:

• consider making use of the ability to introduce/amend an instalment policy;
• note the government’s clear intention to introduce legislation to permit deferral of CIL payments and dis-apply late payment interest for small and medium size enterprises “SMEs”,
• use their discretion in considering what, if any, enforcement action is appropriate in respect of unpaid CIL liabilities;
• take a positive approach to their engagement with SME developers, to ensure CIL liabilities do not cause undue burdens over the period of disruption caused by the coronavirus;
• note the existing flexibilities they have around enforcing CIL for larger developers, including flexibilities over the imposition of surcharges. (It should be noted that late payment interest will remain mandatory where such flexibilities are used)

Government recognise that there is a financial impact of which authorities can use discretion to help alleviate financial burdens on SMEs. These changes do not apply until updated legislation has been issued however the authorities have been urged to acknowledge the intention behind these changes and use their discretion moving forward.

How can Capsticks help?

Our Housing & Regeneration team, one of the largest in the country, advises on all types of development transactions from forward funded schemes, section 106 developments and stock rationalisations to plot sales and general asset management work. We are experts on all aspects of planning law including s106 agreements, CIL advice, planning appeals, Compulsory Purchase Orders and all general planning law matters.

If you have any queries around what's discussed in this article, and the impact on your organisation, please speak to Suzanne Smith or any of your contacts at Capsticks to find out more about how we can help.