In brief
Mishcon de Reya has successfully appealed to the Valuation Office Agency to secure complete removal of an unexpected, and incorrect, Community Infrastructure Levy (CIL) charge on a variation of a permission. The case illustrates that local authorities can and do still make significant mistakes with the complexities of CIL, and that there are circumstances for legitimate challenge.
What happened?
Mishcon de Reya's client owned a large property in Westminster that had been used as a House in Multiple Occupation (HMO), a building rented out to multiple tenants sharing facilities. After obtaining a planning permission in 2021 to regularise the use of the property as a HMO, a further planning permission was granted in 2025 to vary some of the conditions attached to the original permission (known as a "section 73" permission).
Westminster City Council then sent our client a bill for Community Infrastructure Levy (CIL) of almost £255,000, which we appealed.
What is CIL and why did the Council say it was owed?
CIL is a charge that local councils can impose on new developments to help fund local infrastructure such as schools, roads and parks. When a planning permission changes a previous permission without adding any new floorspace, special rules apply to work out whether any CIL is owed.
The Council argued that, even though it had never formally issued a CIL notice when the original 2021 permission was granted, it could effectively work backwards, calculate what it would have charged at the time, and use that figure as the starting point for its calculation on the 2025 permission.
Why we said the bill was wrong
Our argument was straightforward: the rules only allow this type of calculation to be used where a formal CIL notice was actually issued for the original permission. No such notice was ever issued here — a fact the Council itself admitted. You cannot plug a made-up figure into the formula and arrive at a lawful charge.
We also pointed out that the 2025 permission did not involve any increase in the size of the building whatsoever, which is a basic requirement before CIL can be charged on this type of permission.
The result
The Valuation Office Agency (VOA) agreed with us entirely. The CIL payable was determined to be £0; a complete victory for our client.
The VOA found that where no liability notice had been issued for the original permission, the amended planning permission calculation method simply cannot be used, as there is no original notice to feed into the formula. She further noted that, had the Council tried to issue a notice for the 2021 permission now, doing so four years later would not meet the legal requirement to serve notice "as soon as practicable."
Why does this matter?
This decision is a practical and important reminder of two things:
- Councils must follow the rules and follow them promptly. The adjudicator concluded that the Council had not issued a CIL liability notice within a reasonable time following the original permission, and as a result the charge could not stand. Collecting authorities cannot simply fill in the gaps years later when it suits them.
- A section 73 permission with no extra floorspace should not attract CIL. Both parties confirmed that the 2025 permission did not lead to any increase or change in floorspace compared to the original permission. No additional floorspace means no new CIL liability.
Property owners and developers increasingly receive unexpected CIL demands, especially following variations to an existing planning permission. This decision demonstrates that such demands are not always correct, and that they can be successfully challenged.