TheMitchells Posted February 4, 2017 Share Posted February 4, 2017 While at the NSBRC at Swindon last week, I sat in on a lecture for self builders and having already done their 3 day course, I thought it would not be very interesting - heard it all before! However, the speaker was talking about the CIL and how self builders can avoid it but how easy is was to get caught out and end up paying the full mount, which in my area is £200 per square metre of build! I had forgotten this information and was glad to have been reminded. I thought it may be useful to remind everyone how they can avoid the charge - do not start ANY of the build till you ensure you have submitted the correct paperwork and the council have confirmed it is the correct form. I heard several stories of those who had not completed the form correctly; no one told them until it came to the end and they received a bill for the full amount. Self Build Exemption - Whole House Self-build Exemption Overview The Government is keen to support and encourage individuals and communities who want to build their own homes, and is taking proactive steps to stimulate the growth of the self-build market. One measure to help self-builders has been to grant them an exemption from the Community Infrastructure Levy. The exemption will apply to anybody who is building their own home or has commissioned a home from a contractor, house builder or sub-contractor. Individuals claiming the exemption must own the property and occupy it as their principal residence for a minimum of three years after the work is completed. Essentially, there are three types of self-build exemption: self-build exemption - for a whole dwelling [you are here] self-build exemption - for a residential annexe self-build exemption - for a residential extension Whole Dwelling You can apply for exemption from CIL if you are building your own home, and intend to live in it as the owner/occupier. To make a claim, you must: Assume liability to pay CIL certify that the scheme will meet the criteria to qualify as self-build development (using Form 7 Part 1) submit a Commencement Notice, before development commences within 6 months of completion, send us evidence to confirm the project is self-build (using Form 7 Part 2). This provides the evidence to confirm the project is self-build. The evidence must comprise: proof of the date of completion (building completion notice, compliance certificate), proof of ownership (a copy of the title deeds), and proof of occupation as your main residence (Council tax certificate, utility bills, bank statement, electoral roll). In addition, you must also provide a copy of one of the following: an approved claim from HMRC under VAT431C - VAT refunds for DIY house builders specialist self-build warranty approved self-build mortgage from a bank or building society Full details of what is required can be found on the forms. If this evidence is not submitted to the Council within the 6 month time period, the full levy charge becomes payable. Important Information It is important that you do not begin work until you submit your application for exemption and you receive notice from us with a decision. If you start any work, including digging foundations, your application for exemption will be refused. If you fail to submit a Commencement Notice before starting any work, then we will charge the full amount for CIL immediately. If you fail to submit the correct evidence on completion, then we will charge the full amount of CIL immediately. If you receive exemption, and then sell, or rent out, your home within 3 years of the house being completed, we will charge you the full CIL amount immediately. CIL is registered as a land charge and so if any of these disqualifying events occur within three years, we can revoke exemptions and the levy will then be due immediately. Be careful out there - they are after as much money they can get...... 4 Link to comment Share on other sites More sharing options...
ProDave Posted February 4, 2017 Share Posted February 4, 2017 Very useful post. However: In addition, you must also provide a copy of one of the following: an approved claim from HMRC under VAT431C - VAT refunds for DIY house builders specialist self-build warranty approved self-build mortgage from a bank or building society So if you have paid cash (no mortgage), not bothered with a structural warranty, and paid a contractor to build a house ready to move into you won't have a VAT claim as it will all have been charged to you VAT free. Might be a problem for a few? Link to comment Share on other sites More sharing options...
Steptoe Posted February 4, 2017 Share Posted February 4, 2017 @ProDave How can it be charged to you VAT free,? Link to comment Share on other sites More sharing options...
ProDave Posted February 4, 2017 Share Posted February 4, 2017 5 minutes ago, Steptoe said: @ProDave How can it be charged to you VAT free,? I paid a builder to build my shell and all the work he charged me was zero rated as it was a new build. If I had paid him to do the whole lot, it would have been charged VAT free and I would have nothing to reclaim the VAT on. Link to comment Share on other sites More sharing options...
Steptoe Posted February 4, 2017 Share Posted February 4, 2017 Just now, ProDave said: I paid a builder to build my shell and all the work he charged me was zero rated as it was a new build. If I had paid him to do the whole lot, it would have been charged VAT free and I would have nothing to reclaim the VAT on. But surely if you had needed it , he 'could' have charged you the vat on the materials and let you claim that back yourself,? I don't honestly know, but surely there must be some way of doing it. Link to comment Share on other sites More sharing options...
ProDave Posted February 4, 2017 Share Posted February 4, 2017 17 minutes ago, Steptoe said: But surely if you had needed it , he 'could' have charged you the vat on the materials and let you claim that back yourself,? I don't honestly know, but surely there must be some way of doing it. A VAT registered contractor should zero rate parts AND labour for a new build. you certainly won't be able to re claim VAT on labour, you will be told to go back to the contractor and re claim it from them as it should not have been charged. Link to comment Share on other sites More sharing options...
Steptoe Posted February 4, 2017 Share Posted February 4, 2017 7 minutes ago, ProDave said: A VAT registered contractor should zero rate parts AND labour for a new build. you certainly won't be able to re claim VAT on labour, you will be told to go back to the contractor and re claim it from them as it should not have been charged. OK, so then the only option is for you, yourself to actually purchase a substantial amount of the materials,? Which, I suppose, If you have contracted someone to do a turnkey, you don't want the hassle of, Well, when did hmrc ever make anything easy,? Link to comment Share on other sites More sharing options...
ProDave Posted February 4, 2017 Share Posted February 4, 2017 For my money, if I was in that situation, I would pay for a structural warranty. If it's the ticket you need to avoid the CIL then it suddenly becomes much better value. At least this thread has outlined the hoops you need to jump through and the pitfalls that could make your claim invalid. 1 Link to comment Share on other sites More sharing options...
Jeremy Harris Posted February 4, 2017 Share Posted February 4, 2017 3 hours ago, TheMitchells said: Be careful out there - they are after as much money they can get...... That's a very useful reminder, as I think someone here (may have been on the old forum) got caught out by not following the precise paper trail needed in order to get the CIL exemption. IIRC, temp wrote something on this around the time the CIL exemption was introduced, highlighting the potential pitfalls for the unwary. I'll have a poke around and see if I can find it, as it would be useful to compile a "sticky" here as a reminder, in bullet point form, as to how we can avoid getting caught out. The same sort of thinking seems to be behind the HMRC and VAT reclaims I've recently found - unlike the VAT helpline (who are very good) the reclaim people are both obstructive and slow, in my recent experience. I've also found that the local authority tried very hard (to the extent of breaking into our security fenced site, with no PPE worn, one evening) to try and get evidence to charge Council Tax as early as possible during the construction of your build. Without a shadow of doubt they are after a much money from you as they can get! Link to comment Share on other sites More sharing options...
Barney12 Posted February 5, 2017 Share Posted February 5, 2017 A very useful post. I had been led to believe that if you are replacing an already existing dwelling (which is what I'm doing and I know a few more here are) then CIiL doesn't apply? Having just (quickly) read read the links I can't really find that scenario specifically mentioned. Link to comment Share on other sites More sharing options...
dogman Posted February 5, 2017 Share Posted February 5, 2017 I can confirm that replacement dwelling is exempt ( at least in our case) we were surprised and asked for confirmation in writing Link to comment Share on other sites More sharing options...
Barney12 Posted February 5, 2017 Share Posted February 5, 2017 48 minutes ago, dogman said: I can confirm that replacement dwelling is exempt ( at least in our case) we were surprised and asked for confirmation in writing Thanks. I think I might get the same confirmation in writing just for reassurance. Link to comment Share on other sites More sharing options...
PeterW Posted February 5, 2017 Share Posted February 5, 2017 Ok just to be clear .... CIL is different between councils CIL is part of the planning process - the council decide if you are exempt or not Replacement dwellings are ONLY exempt if they do not breach your councils CIL extension rule (i.e. Additional 100m2 of floor space) CIL cannot be applied retrospectively - if it is not in your approval then they cannot go back and add it UNLESS you reapply for planning If you check your council planning pages carefully it tells you what they will apply it to. Its a minefield and the councils in my experience are either very good or very bad at dealing with it..!! Link to comment Share on other sites More sharing options...
RichS Posted February 5, 2017 Share Posted February 5, 2017 So, my planning approval states, in a section under the heading of:- PUBLIC OPEN SPACE There is no requirement for a financial contribution towards open space for a development of this size. Is that my get out of jail free card or is that referring to something else and not CIL??? Link to comment Share on other sites More sharing options...
Jeremy Harris Posted February 5, 2017 Share Posted February 5, 2017 1 hour ago, RichS said: So, my planning approval states, in a section under the heading of:- PUBLIC OPEN SPACE There is no requirement for a financial contribution towards open space for a development of this size. Is that my get out of jail free card or is that referring to something else and not CIL??? Probably not! Each local authority (as Peter W mentioned) have their own list of what is included in their CIL and what is excluded. They could have chosen to exclude a public open space contribution from CIL and leave it as something that could be added via an S.106, for example. Best to check what your LA has included in their CIL and what they haven't, it should be somewhere on their website, with luck. Link to comment Share on other sites More sharing options...
dogman Posted February 5, 2017 Share Posted February 5, 2017 We did all the required forms for the self build exemption. Just in case. Submitted them as required which is when they told us it was not needed. Link to comment Share on other sites More sharing options...
Ferdinand Posted February 5, 2017 Share Posted February 5, 2017 Our LA just doesn't do CiL as far as I know. Link to comment Share on other sites More sharing options...
Ferdinand Posted February 5, 2017 Share Posted February 5, 2017 (edited) @TheMitchells Planning Resource maintain an interactive map here: http://www.planningresource.co.uk/article/1212817/community-infrastructure-levy-maps You will probably need to do the free registration option. They also have an entire site section and blog about it. To read some things it may help to add "cache:" before the url to get the Google cache copy. Ferdinand Edited February 5, 2017 by Ferdinand 1 Link to comment Share on other sites More sharing options...
PeterW Posted February 5, 2017 Share Posted February 5, 2017 31 minutes ago, Ferdinand said: Our LA just doesn't do CiL as far as I know. .... which is odd bearing in mind it borders one that has one of the highest charges outside of London ..! As CIL has to be "ringfenced" a lot of councils are seeing the cost of administration outweighing the actual income and benefit as most of the big house builders weigh in with an S106 that sweetens the deal. What is interesting is that there have been a number of big S106 deals that have had an "education" element to them yet it never makes it to the local school because it is an academy... Link to comment Share on other sites More sharing options...
Ferdinand Posted February 5, 2017 Share Posted February 5, 2017 7 minutes ago, PeterW said: .... which is odd bearing in mind it borders one that has one of the highest charges outside of London ..! As CIL has to be "ringfenced" a lot of councils are seeing the cost of administration outweighing the actual income and benefit as most of the big house builders weigh in with an S106 that sweetens the deal. What is interesting is that there have been a number of big S106 deals that have had an "education" element to them yet it never makes it to the local school because it is an academy... That sounds like a bit of a scandal, since the providers of the education should get the dosh whether academies or not. Link to comment Share on other sites More sharing options...
Jeremy Harris Posted February 5, 2017 Share Posted February 5, 2017 (edited) 44 minutes ago, Ferdinand said: That sounds like a bit of a scandal, since the providers of the education should get the dosh whether academies or not. It is, and it can be addressed if anyone has the will to do so. My last job involved having some new labs and offices built and we were stung for around £300k in S.106 charges. They were all listed, and were mainly road improvements, like fitting a junction with traffic lights, making a bit of road cycle-friendly and improving a notoriously dangerous T junction. I read the agreements carefully when they came back from our legal people, and the standard conditions were included. These state that the payment of the S.106 monies had to be made before the buildings were first occupied, that the monies were listed against specific road improvements, and that if the local authority failed to undertake the stated improvements within 5 years of the payment of the monies then we were entitled to that money back, plus interest at 1% (I think) above the B of E base rate for the five year period. In general, ********** Council made their road improvements very quickly, within three or four months of the payments. ********** Council were totally different, and didn't undertake any of the work at all. After five years I rang my successor to remind him that he needed to get the S.106 back, as I'd driven along the hill and seen that the road junction work hadn't been done. He got the legal people to claim it back from the council, with interest. Sadly the bit of road that was to be improved using that money is now even worse than it was. Sometimes I really don't understand how local authorities can be so stupid. I think the main issue is probably that very few developers ever look back to see if S.106 work was actually completed, and the S.106 is considered to be an official bribe to get PP, so written off by them at the time of payment. If I'm right, then it would seem that some local authorities just keep the S.106 money and use it as general funds, which is specifically against the way an S.106 should operate. Edited February 5, 2017 by JSHarris typo, and decided to anonymise the LAs, just to be on the safe side Link to comment Share on other sites More sharing options...
Temp Posted February 5, 2017 Share Posted February 5, 2017 5 hours ago, RichS said: So, my planning approval states, in a section under the heading of:- PUBLIC OPEN SPACE There is no requirement for a financial contribution towards open space for a development of this size. Is that my get out of jail free card or is that referring to something else and not CIL??? Thats most likely a reference to an S106. In some areas builders have to pay both the CIL and any S106 contributions. However S106 are becoming limited. Councils can't require more than 5 schemes to contribute to the same thing under S106. Link to comment Share on other sites More sharing options...
RichS Posted February 5, 2017 Share Posted February 5, 2017 Thanks for all the feedback re, my question. I have done some internet researching and it would appear that, as yet, my LA is not imposing a CIL charge. Happy days Link to comment Share on other sites More sharing options...
Barney12 Posted February 5, 2017 Share Posted February 5, 2017 This thread was a great prompt. After some extensive Googling it appears that the Dartmoor National Park have not implemeted CIL. Link to comment Share on other sites More sharing options...
le-cerveau Posted February 6, 2017 Share Posted February 6, 2017 Same for me , a great prompt. Fortunately Allerdale do not yet have a CIL policy so no charges, but I had to check. +1 Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now