Farmers advised to challenge Community Infrastructure Levy (CIL)
Date of Article
Feb 02 2012

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London, February 1, 2012, As local authorities across the country come to the end of the consultation period to review changes to local government policy following the Royal Assent of the Localism Bill, national property consultancy Carter Jonas is advising the farming community to challenge the Community Infrastructure Levy (CIL), to avoid being hit by excessive charges linked to planning permission.

The CIL was first proposed by the Labour government in 2008 and will now be incorporated into the Localism Bill, which has been labelled by the Coalition as “the biggest transfer of power in a generation, releasing councils and communities from the grip of central government” and is due to be enforced by local authorities from April next year. 

It is designed to enable local authorities in England and Wales to raise funds from developers who are undergoing new building projects in their area. It applies to most new buildings and charges are based on the size and type of the new development. Notably for farmers, it could potentially apply to agricultural buildings.

“However, many farm buildings have no effect on local amenities and make no demand on publicly-funded services, argues Tim Jones, Head of Rural Division at Carter Jonas.”

Many farmers believe it would be unfair to insist they pay a levy which could be regarded as a tax on virtually all development if proposed schemes with no local impact were still made subject to CIL. The costs could also make new agricultural buildings non-viable, although like-for-like replacement of existing buildings avoids CIL.

The CIL will pay for improvements to local infrastructure and spreads the costs across all planning permissions that create a new total floor area of 100 square metres, or more, of gross internal floor space, or involves the creation of additional dwellings, even when that is below 100 square metres.

“We have heard from virtually all of the 18 local authorities we contacted in central southern England,” said Jones. “The South Downs National Park Authority (SDNPA) has indicated it will make no charge for agricultural buildings but CIL will apply to equestrian schemes. All of the other responses indicate there will be consultations over the coming 12 months on how the levy should be imposed.

“The Government had already said that buildings for charitable uses and social housing should be exempt but there is provision for other exemptions, although these extra exceptional reliefs are at the discretion of each authority. If a non-CIL policy is adopted, it can later be cancelled. The situation has the potential to be very confusing.”

Government guidelines state: “Most buildings that people normally use will be liable to pay the levy. But buildings into which people do not normally go and buildings into which people go only intermittently for the purpose of inspecting or maintaining fixed plant or machinery, will not be liable to pay the levy. Structures which are not buildings, such as pylons and wind turbines, will not be liable to pay the levy.”

“I have heard some interpretations that only buildings for such things as pumping or generating stations would be exempt but farmers could fairly argue that purely agricultural buildings should also fall within this scope and that is the view the SDNPA is taking,” adds Mr. Jones. “It bolsters the argument for exemption significantly.

“It is important that the farming community is not complacent about this Act. Local authorities can decide the amount of CIL and how it is applied. Farmers should be aware of local consultations and make sure their voices are heard either through CLA, the NFU, or personal contact with councillors and officials. So far, we have only found one council - in the Midlands - that agrees with SDNPA by saying agricultural buildings will be exempt but these are pointers towards the policy others should adopt.

“Where CIL is imposed on farm buildings, the levy can be paid in kind. This could mean a land swap for an affordable housing scheme as payment for the levy. Perhaps philanthropic farmers who are approached to provide such land will hold back in case it can be used in a later CIL swap. This could potentially restrict the availability of land for much-needed housing schemes that help youngsters stay in their home communities.”

For press information contact Gemma Haimes, head of PR, Carter Jonas, 020 7298 1822 gemma.haimes@carterjonas.co.uk