Is CIL payable on a self-build conversion?

[Andy Le Vien]

Interested to know whether anyone in a CIL area has had to pay.  I'm doing a conversion in Croydon (not a barn!) and am being charged £11000 even though on every other count I would qualify for Self-Build exemption.

[PeterW]

Nope - not payable. 

 

Follow the CIL exemption process and apply as a self builder before you do anything. 

[Andy Le Vien]

Thanks!  I've applied for exemption but the CIL person in Croydon Planning says that a self build has to be "new build".  The regulation merely says "a dwelling built", which is open to interpretation.  I believe that the definition can be generated by the council itself, rather than being made by the Planning Inspectorate.  I was hoping to find that other councils interpret the Regulation differently, which might help when I appeal.   And I think I will have to go through the Council's complaints procedure in order to appeal.   I don't suppose you have any particular cases in mind that I could quote?  Any corrections to my beliefs also gratefully received!

[PeterW]

@Andy Le Vien Croydon are wrong...

 

Firstly, you can claim relief on any dwelling being created, and dwelling has a legal definition in a number of statutory instruments, and is also available on residential extensions and annexes. So a new build is not a criteria...

 

Secondly - this is from Croydons own document as a reason for exemption...

 

 • Self-build housing (which includes both homes built by the occupier and homes commissioned by the occupier and built by someone else) for occupation as a sole or main residence.

 

That also states that appeals are as follows :

 

Appeals against the value of the exemption granted for self-build homes including refusal to grant exemption 10.9 You may appeal to the VOA (see www.voa.gov.uk/cil/index.html) against the value of the exemption granted for self-build homes or refusal to grant exemption by the council. Any such appeal must be made within 28 days of receiving notice of such a decision by the council. Where an appeal is allowed, any demand notices (including surcharges) relating to the development in question will be suspended pending the outcome of the appeal.

 

So I would ignore Croydon and go straight to VOA....

[Andy Le Vien]

That is fantastic!  Thank you very much indeed.

[newhome]

Did you have a look at guidance from other  local authorities? I saw this for South Downs for example. I’m not suggesting that every interpretation is correct as it may not be, but it will help your case with VOA if you read some examples and understand how your conversion may meet the criteria noted. Croydon’s guidance / interpretation seems particularly poor in comparison to guidance elsewhere to be honest. 

 

WOULD CIL BE CHARGEABLE ON A CONVERSION (E.G. BARN OR GARAGE CONVERSION)?

A conversion could be CIL liable unless it can be demonstrated that the building to be converted passes the ‘In Use’ Test. In order for it to pass the Test, evidence of its lawful use, for a period of at least six months without a break in the past three years (the three year period ending on the day planning permission first permits the development), needs to be provided. Evidence may include time-stamped photographs showing the building in lawful use; sworn statements witnessed by a solicitor, of people who can confirm the use claimed; tenancy agreements and utility or other bills relating to the use claimed. Business Rates or Council Tax bills will only be accepted as evidence of lawful use where it is accompanied by an additional form of evidence. If the building to be converted has not been in lawful use then the floor space will not be offset from the CIL liability.

 

Some guidance in this link too, and many others:

 

https://www.roythorne.co.uk/site/blog/development_and_planning/community-infrastructure-levy-and-rural-developments

 

 

 

[Andy Le Vien]

Oh bother!  I checked with the VOA.  They replied:-

"Dear Andrew

Thank you for your email, however I am afraid the Valuation Office Agency can only deal with appeals under the regulations stated on the below page and which have been made in the official manner via an appeal form.

https://www.gov.uk/guidance/community-infrastructure-levy-how-to-make-an-appeal

However, please note that the VOA cannot get involved with the Collecting Authority’s (London Borough of Bromley)(sic) decision to grant self-build exemption. This issue is between yourselves and the Collecting Authority. "

 

This list doesn't include granting self build exemption

Appeals dealt with by the Valuation Office Agency

You can appeal against a CIL charge to the Valuation Office Agency (VOA) if:

• the collecting authority’s calculation of the chargeable amount (regulation 114 appeal)
• the collecting authority’s apportionment of a CIL charge between different landowners in ‘default’ cases (regulation 115 appeal)
• the collecting authority’s determination of the value of the interest in land in respect of which charitable relief was claimed (regulation 116 appeal)
• the collecting authority’s decision not to grant exemption for a residential annex because the annex is not wholly within the curtilage of the main dwelling (regulation 116A appeal)
• the collecting authority’s calculation of the amount of the exemption for self-build housing (regulation 116B appeal)

 

[Andy Le Vien]

Thanks @newhome.  The problem is Croydon's interpretation of Self-build, and as your link says, " If you intend to live in the conversion yourself, you may qualify for the self-build exemption .... Such considerations can become very technical and I recommend that you seek specialist advice if in doubt."  Which is where you guys come in!  Trying to establish my grounds before spending money with a solicitor.

 

[PeterW]

They do get involved - it’s a 116B appeal which refers to the amount of exemption given - in your case it is zero..!

 

“the collecting authority’s calculation of the amount of the exemption for self-build housing (regulation 116B appeal)“

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/421848/Guidance_Leaflet_for_Appeal_Form__clean_.pdf

 

I would write to Croydon asking them where the definition of a new build is in the CIL regulations. 

 

Out of interest what are you converting ..??

 

 

[Andy Le Vien]

I did ask, as part of a long and frustrating conversation with the CIL officer.

"Dear Mr Le Vien

Our definition is based on the The Community Infrastructure Levy Regulations 2010 as amended which states.

Section 54A.— (2) Self-build housing is a dwelling built by P (including where built following a commission by P) and occupied by P as P’s sole or main residence.

I trust this clarifies the matter. " 

It didn't clarify anything.

I'm converting my recording studio, as sadly my business partner wants to retire.  So there's a lot of construction involved, moving walls, building a corridor and an extension on the back, in order for it to become habitable. 

 

[PeterW]

Ok - so you’ve currently got a certificate of lawful use on the existing property. 

 

I’d suggest the following (and I’m not a lawyer or planning expert..!) which would to be to convert what is there first on a new planning application. It’s entirely legal and a change of use is exempt from CIL anyway. 

 

Then when that is done and signed off, use the old PP to build the extension or even do it under permitted development if needed. 

 

May cost you two lots of BRegs charges but it’s got to be less than the CIL liability ..?

[Andy Le Vien]

Croydon say that change of use is chargeable as it's from B1 to residential.  It might be possible to do a change of use to an intermediate use category and then to residential, but I think there must be a minimum time spent in the intermediate stage.  We're certainly considering doing the conversion without the rear extension, and paying I suppose a fifth less CIL, then using PD for the extension.

[PeterW]

From Michelmores 

 

Would a permitted change of use from offices to residential trigger a CIL liability?

 

 

From 30 May 2013 premises in use class B1(a) office use can change to C3 residential use (subject to prior approval covering flooding, highways/ transport issues and contamination) without requiring planning permission, under permitted development rights.

Permitted developments are liable for CIL in the same way as development permitted by planning permission. Usually however, a simple change of use will not trigger CIL, as no new buildings are being created. However existing floorspace may only be used to offset the CIL liability where it has been in continuous lawful use for at least six months in the 12 months. So if the office building has not been in a lawful use for at least 6 months in the last 12 months and the use changes to residential, CIL could be triggered

 

So basically they can’t charge CIL for that as you can offset, and any new extension under the PP would be less than 100m2 I expect anyway so you would not pay... 

[Andy Le Vien]

Conflicting opinions here:

 

from https://www.lbbd.gov.uk/.../2014/.../CIL-Collection-Frequently-Asked-Questions-201...

 

Community Infrastructure Levy – Frequently asked Questions 2014

Q: Is CIL payable on change of use?
A planning application for the change of use of an existing building will not be liable to CIL unless it involves an extension which provides 100 square metres or more of additional floorspace, or involves the creation of a new dwelling even when it is below 100 square metres. The amount payable will depend whether or not the existing building has been in continuous lawful use for at least six months in the last three years prior to the development being permitted.

 

I've attached the full PDF.  If you look at the grid of possible charges we should be chargeable for the additional floorspace only.  But because it is a change of use to residential, Croydon say we are charged for all the floorspace as it is now residential.  Heads I win, tails you lose.

CIL-Collection-Frequently-Asked-Questions-2014(2).pdf

[PeterW]

Croydon aren’t doing the calculation correctly ... you may need the VOA on this after all as it should be calculated on any new space created minus any existing use B1 etc 

[Andy Le Vien]

Yes, that's what I thought.  It's a problem when what should be a neutral department gets turned into a cash generator.  I queried this with Croydon and they were adamant.

[Temp]

Be aware that the process for claiming the self build exemption is strict. If you start work before getting _all_ the paperwork done you loose the exemption.

 

 

[Temp]

Are you extending the building?  If not then I agree with others.  Developments that only involve a change of use are exempt.

 

There is a database of appeal example by the Valuation Office Agency here...

 

https://www.gov.uk/government/collections/community-infrastructure-levy-appeal-decisions#2018

 

One or two are for change of use.

 

 

 

  

 

[Andy Le Vien]

There's a small extension, from 52m to 64m.  I have read or skimmed all of those appeals!  Nothing quite fits what I'm doing, except to tell me that the Council sets the grounds for Self-build exemption. 

"However, I should make clear that there is no ground of appeal available to overturn the Council’s decision on the application for CIL exemption and I have no powers to do so" (1200107.CIL_Redacted).  This particular appeal might have been stymied by not following the rules of course. I can't tell from the PDF.

And yes, I'm very aware of the strictness of the conditions.  I'm getting everything ready to go, but nothing physical will happen to the site before all the forms go in.

[Temp]

Having read some more I agree with PeterW.

 

The self build exemption can be interpreted as only applying to new builds not conversions.

 

Conversions are already "exempt" in that only new floor area should be charged. Looks like you should only be charged on 64-52=12sqm. The <100sqm rule doesn't apply if the conversion creates a dwelling so I think there will be something to pay.

 

16 hours ago, Andy Le Vien said:

"However, I should make clear that there is no ground of appeal available to overturn the Council’s decision on the application for CIL exemption and I have no powers to do so" (1200107.CIL_Redacted).

 

No problem. You won't be appealing the decision to refuse a self build exemption you will be appealing the calculation.

 

Have they explained how they arrived at £11,000 ?

 

 

 

 

 

Edited June 2, 2018 by Temp

[Temp]

The relevant regulation is 40(7)..

 

https://www.legislation.gov.uk/ukdsi/2014/9780111106761/regulation/6

 

(7) The value of A must be calculated by applying the following formula—

where—

= the gross internal area of the chargeable development;

= the gross internal area of the part of the chargeable development chargeable at rate R;

= the aggregate of the gross internal areas of the following—

(I) retained parts of in-use buildings, and

(ii) for other relevant buildings, retained parts where the intended use following completion of the chargeable development is a use that is able to be carried on lawfully and permanently without further planning permission in that part on the day before planning permission first permits the chargeable development;

= the aggregate of the following—

(I) the gross internal areas of parts of in-use buildings that are to be demolished before completion of the chargeable development, and

(ii) for the second and subsequent phases of a phased planning permission, the value E_x (as determined under paragraph (8)), unless E_x is negative,

provided that no part of any building may be taken into account under both of paragraphs (i) and (ii) above.

 

From what you said:

Gr = 64sqm

Kr = 52sqm

 

If anything is being demolished you can subtract that as well. 

 

It looks like you  can ask the Charging Authority to review the calculation before going to the VOA. Again this wouldn't be a review or appeal against the refusal to allow a self build exemption it would be to review the calculation in the light of 40(7).

 

If they still refuse to subtract existing floor area then you only have 60 days to appeal to the VOA from the date of the original liability notice. So don't let the council drag it out. If you don't get an answer hit them with an appeal to the VOA on same grounds before the deadline. See Regulation 114 and bottom of page 2 on time limits.

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/421848/Guidance_Leaflet_for_Appeal_Form__clean_.pdf

 

Relevant appeals:

 

In this appeal the CA argued that the existing floor space Kr should not be deducted because the applicant couldn't prove it had previously been in lawful use. The Valuation Office accepted the evidence of lawful use and allowed the deduction of existing floor space. See para 15.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/523432/2016-05-16_-_VO_4003__3_.pdf

 

 

[Temp]

Sorry last post has a missing end quote and I cant figure out how to fix it.

 

 

[Andy Le Vien]

This is Croydon's calculation:

 

Dear Mr Le Vien,

CIL Charge for Greater London Authority’s is £25.94 per square metre.

CIL Charge for Croydon is £150.91 per square metre.

You are charged for the new residential floorspace created (In this case it doesn’t matter that it is in an existing building, as the development involves the conversion of existing ‘non-residential floorspace’ to residential floorspace).

In this case the new flat has a floorspace of 64 square metres – this is confirmed on the approved application drawing no. 0302.11 Rev B.

64 x £25.94 = £1660.16

64 x 150.91 = £9658.24

Hence total CIL of £11,318.40.

 

If I only have 60 days from the liability notice I'm stuffed anyway, it was 26th March.  I spent a month back and forth querying it with the Planning department.

 

[newhome]

4 hours ago, Andy Le Vien said:

If I only have 60 days from the liability notice I'm stuffed anyway, it was 26th March.  I spent a month back and forth querying it with the Planning department.

 

Well you haven’t got anything to lose by appealing, they can only say no, so write a covering letter highlighting the protracted correspondence with the planning department (send evidence too) and get in fast. You can easily calculate the additional floor space being created and thus the amount you calculate is due. As said above you are CIL liable, it just works out as zero if the floorspace is unchanged, or in your case only payable on the increase in floorspace. 

 

This link has your scenario noted in the 9th one down. For shop read recording studio. 

 

https://www.eastcambs.gov.uk/planning/my-development-cil-chargeable

 

Edited June 2, 2018 by newhome

[Andy Le Vien]

Thank you very much for that.  Really, really helpful.  Email is going in tomorrow!  If this doesn't work we might try to reapply for PP without the rear extension, get a new CIL liability and appeal straightaway.  Then build the extension under PD or the previous PP.