The government has set out the draft Community Infrastructure Levy (Coronavirus) (Amendment) (England) Regulations 2020 which will give authorities more discretion to defer CIL payments for small and medium sized developers without having to impose additional costs on them. In addition to this, the regulations will give authorities the ability to disapply late payment interest and surcharge payments; and to credit interest already charged to developers.
The regulatory changes and this guidance apply to England only, although this yet to be formally adopted.
This guidance will come into effect when the regulations come into force and will remain in place until 31 July 2021, as the measures only apply to CIL payments that are payable on or after the date the instrument comes into force until 31 July.
In order to qualify for a CIL payment deferral, a developer will need to:
- – have an annual turnover not exceeding £45 million;
- – have been served with a CIL payment demand notice;
- – be required to make that payment between the date that the regulations are first implemented and 31st July 2021; and
- – be experiencing some form of financial difficulties as a result of the effects of coronavirus that have impacted their ability to make the CIL payment on time.
The collecting authority can request whatever information from the developer they reasonably need to consider the deferral request.
The developer should make a deferral request to the collecting authority, in writing, no more than 14 days before, or as soon as practicable after the date the CIL payment is due. If the information requested is not provided within the specified time, the collecting authority can refuse to grant a deferral request.
The authority has a maximum of 40 days to consider the application and notify the applicant of its decision to allow or refuse the payment deferral, in writing. This period starts from the day that the collecting authority receives the request for a payment deferral.
Late payment interest and surcharges cannot be charged while the collecting authority is considering a deferral request.
Should the request be granted, it can only be for a maximum period of 6 months from the date that the request was received. The authority must serve a revised demand notice which outlines the amount of CIL payable and the revised date in which the payment is due (including any late payment interest and surcharges accrued before the deferral request).
Where a payment deferral has been refused, the authority should notify the applicant as soon as practicable, and no later than 40 days after receipt of the request. The applicant must then comply with the original demand notice served before the deferral request was made; or a revised demand notice which was served after the deferral request was made but which is not related to that deferral request. Payment must be made within 7 days to avoid late payment interest.
If a deferred CIL payment becomes due during the ‘material period’ the applicant can apply for a further deferral for the same chargeable development.
The collecting authority must charge late payment interest that has accrued in the period between the start of lock (21 March 2020) and the point in which the new regulations come into force. The applicant may request that the authority credits this interest payment against the CIL amount due under the revised demand notice, known as an “interest request”. Any late payment interest that has built up before 21 March 2020 cannot be credited against CIL amount due. If the collecting authority does not consider the request appropriate and refuses it, the applicant will be liable to pay the outstanding interest in accordance with existing CIL Regulations 2010 (as amended).
Further information can be found using the following link: https://www.gov.uk/guidance/coronavirus-covid-19-community-infrastructure-levy-guidance#draft-guidance-on-the-community-infrastructure-levy-coronavirus-amendment-england-regulations-2020