CIL EXEMPTION: HOW TO FOLLOW THE FOUR-STEP PROCESS
HOW TO CLAIM
To claim the CIL exemption for a self-build home, you need to follow four specific steps. Failure to follow them exactly can result in the full CIL liability becoming payable and there is currently no appeal process to remedy a failure to comply with the regulations. It is therefore essential that the four steps are followed precisely.
The first three steps must be undertaken before commencement of the development as defined by Section 56 of Part III of the Town and Country Planning Act 1990. The fourth step must be undertaken after completion of the build.
STEP 1: ASSUME LIABILITY
To claim the self-build exemption, you must first assume liability for CIL on the development. This is done by completing an Assumption of Liability Form (CIL Form 2). If you have bought a plot with an existing planning permission and the original levy liability was in the name of another person, you must complete a Transfer of Liability Form (CIL Form 4) and submit this to the collecting authority. A new CIL liability notice will be issued in your name.
STEP 2: SUBMIT A SELF-BUILD EXEMPTION CLAIM FORM PART 1
A Self-build Exemption Form Part 1 (Form 7) must be completed and submitted to the charging authority prior to commencement of development and requires you to certify:
● The name and address of the person(s) claiming liability
● That the project is a ‘self-build project’ for purposes of the exemption set out within the regulations
● That the applicant will occupy the premises as their principal residence for a period of three years from completion
● That the applicant will provide the required supporting documentation on project completion to confirm their development qualifies for relief
● The amount of de minimis state aid received by the applicant in the last three years prior to the submission of the application for relief. On receipt of the claim form, the collecting authority must notify you in writing as soon as practicable, confirming the amount of exemption granted.
If you do not agree with the value of the exemption granted, you have a right to appeal under Regulation 116B. Appeals should be lodged with the Valuation Office Agency. [NOTE] The development must not commence before Step 3 is complete or you will be liable for a surcharge, or in some circumstances the full CIL liability will become payable.
STEP 3: SUBMIT A COMMENCEMENT NOTICE
To claim the CIL exemption for self-build, a Commencement Notice (CIL Form 6) must be received by the collecting authority before any qualifying works have commenced and the form must state the date on which works will commence. Commencement of development is defined in the Town and Country Planning Act 1990, so ensure you read and understand this document. If your CIL liability notice was issued on or after 1 September 2019 and you fail to ensure the council have received Form 6 prior to the commencement date (they will confirm receipt), you will be liable to pay a surcharge of 20% of the CIL liability or £2,500, whichever is the lower. If the planning permission to which the CIL liability applied was granted before 1 September 2019 and the development commences before the charging authority has received Form 6, the exemption will be rescinded and the full CIL liability is payable.
STEP 4: SUBMIT A SELF-BUILD EXEMPTION CLAIM FORM PART 2 FOLLOWING THE BUILD
Self-build Exemption Form Part 2 (CIL Form 7) must be completed and submitted to the charging authority along with additional supporting evidence within six months of the date of issue of the Building Regulations compliance certificate. Failure to provide all of the evidence required to prove the project is a self-build within six months of the issue of the Notice of Compliance for Building Regulation will also result in the exemption being rescinded.
Supporting evidence required includes: ● A compliance certificate for the development under either Regulation 17 of the Building Regulations 2010 or Section 51 of the Building Act 1984
● Proof of the date of completion — a copy of the building completion or compliance certificate for the home issued by building control
● Proof of ownership — a copy of the title deeds (freehold or leasehold)
● Proof of occupation of the dwelling as the applicant’s principal residence – a council tax bill or certificate – and two further proofs of occupation of the home as a principal residence (a utility bill or bank statement or confirmation that the applicant is on the local electoral roll)
In addition to the above, applicants must also provide a copy of one of the following (please see note below the listed items):
● An approved claim from HM Revenue and Customs under ‘VAT431NB: VAT refunds for DIY housebuilders’; or
● A specialist self-build warranty; or an approved self-build mortgage from a bank or building society.
The charging authority has the discretion, but is not required, to accept other forms of documentary evidence instead of any of the three items above. This should be agreed in advance with the charging authority (at the point of making the Part 1 application for the exemption or as soon as possible thereafter) but the charging authority may still consider utilising discretion at the Part 2 stage of the process.
If you fail to comply with the evidence requirements on completion, the collecting authority must give you at least 28 days to submit the necessary form and evidence before taking any further action.