Summary: Mrs X complained the Council sent her a misleading letter and Liability Notice and as a consequence wrongly made her liable to pay Community Infrastructure Levy (CIL) of over £20,000, for a self build development which should be exempt. There is no evidence of fault in the way the Council made Mrs X liable and sought to recover the CIL due on her property.

The complaint

1. The complainant, whom I shall refer to as Mrs X complained the Council sent her a misleading letter and Liability Notice and as a consequence has wrongly made her liable to pay Community Infrastructure Levy (CIL) of over £20,000, for a self-build development which should be exempt.

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The Ombudsman’s role and powers

2. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
3. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

4. As part of the investigation, I have considered the complaint and the documents provided by Mrs X and the Council.
5. Mrs X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Community Infrastructure Levy

6. The Community Infrastructure Levy (CIL) is a planning charge introduced by the Planning Act 2008 as a means for local authorities in England and Wales to help deliver infrastructure to support the development of their area. It came into force on 6 April 2010 through the Community Infrastructure Levy Regulations 2010.
7. Some developments may be eligible for relief or exemption from the CIL. Strict requirements apply about the timing of the exemption process.
8. Government guidance in place when Mrs X was granted planning permission sets out the four steps that need to be undertaken and the required timescales to be met to gain a self build exemption. The applicant must:
• Assume liability to pay the CIL by submitting an Assumption of Liability form;
• Submit a Self Build Exemption Claim Form – Part 1. If the development commences before the collecting authority has notified the claimant of its decision on the claim, the levy charge must be paid in full.
• Submit a Commencement Notice to the collecting authority prior to the commencement of development; and
• Following the completion of the build, submit the Self Build Exemption Claim form – Part 2.

What happened here

9. Several years ago, the Council granted planning permission for Mrs X to convert a barn into a dwelling house. The decision notice included an informative confirming the development was a chargeable development liable to pay CIL. It stated:

“the Council will issue a Liability Notice for the development once liability had been assumed. Liability must be assumed prior to the commencement of the development. Failure to comply with the correct process as detailed in the regulations may result in surcharges and enforcement action and the liable party will lose the right to pay by instalments.”

10. Mrs X’s planning agent submitted a CIL Assumption of Liability form, naming Mrs X as the liable party. In 2016 the Council sent Mrs X a Liability Notice informing her she was liable to pay CIL of £17,801.29. The covering letter states:

“Please find enclosed CIL liability notice for the above development.

Please ensure that the enclosed CIL Commencement Notice is submitted and received by the District Council at least 1 day prior to the commencement of development in order to remain eligible to pay in instalments.

Failure to follow the CIL process correctly will result in the CIL charge due in full immediately and surcharges may apply.

Please do not hesitate to contact me if you require any further information.”

11. Mrs X states she was aware that professional builders had to pay CIL and could apply to pay in instalments. She was also aware that people building their own homes were exempt from CIL. Mrs X states that having read the letter she concluded it was not intended for her as a self builder and filed the letter without reading the liability notice.
12. A couple of years later, shortly after work began on her house, Mrs X received an amended CIL Liability Notice and a CIL Demand Notice. Mrs X consulted her planning agent and made a retrospective application for exemption. She asserted the Council’s letter in 2016 were misleading as it only referred to methods of payments and penalties relaying to payments. This did not apply to Mrs X as she would be exempt from the CIL. Mrs X also questioned why the Council had not sent a copy of the Liability Notice to her agent in 2016 and why it had not sent her a reminder. Mrs X asserted the Council’s failings invalidated the invoices.
13. In its response the Council stated it had served the Liability Notice on Mrs X as the applicant and owner of the land. There was no requirement on the Council to serve notice on an applicant’s agent, and the notice it had sent Mrs X did not suggest copies had been sent to any third parties. The Council did not accept there had been a failure in due process.
14. The Council also noted that the Liability Notice issued in 2016 advised Mrs X she may be eligible for relief but was it clear that no relief or exemption had been granted at that point. A self-build exemption is available, but the regulations and guidance make it clear this must be applied for and due process followed. The Council had not received a claim for self-build exemption.
15. In addition, the Liability Notice also stated Mrs X would need to submit a Commencement Notice at least one day prior to commencement. The failure to submit a Commencement Notice would have invalidated any claim for exemption had it been granted.
16. The Council confirmed there was no requirement to issue reminders and asserted Mrs X could have contacted the Council at any point to check the appropriate forms had been completed.
17. The Council also confirmed it was not within its power to retrospectively grant exemptions, and that a Commencement Notice was not valid unless it was submitted one day prior to commencement. The Council advised Mrs X that the regulations did not allow any discretion on this point.
18. Mrs X did not consider the Council had addressed her concerns as it had only referred to the Liability Notice, not the covering letter. She maintained she was misled by the covering letter in 2016, which she considered was only applicable to a commercial developer. She stated the letter did not refer to exemptions or set out the requirements she needed to follow. Mrs X also maintained the Council does generally copy in agents and should have done so here. It should also have sent a reminder, which would have prompted her to consult her agent. She considered the Council’s actions amounted to maladministration and had caused her an injustice.
19. The Council considered Mrs X’s correspondence was a formal complaint. It stated that while agents were the primary point of contact in determining planning applications, it was not normal practice to copy in agents in matters relating to CIL. The Council stated it had issued the CIL notices in accordance with the CIL Regulations and noted the Liability Notice issued in 2016 included a paragraph advising she may be eligible for a reduction in CIL liability if she was constructing a self build home.
20. In addition, the Council advised Mrs X it was limited in what could be offered as a resolution. The CIL liability must be paid in full to discharge the local land charge relating to it. The Council suggested agreeing a suitable instalment plan to reduce the burden. As required by the Regulations, this would be subject to late payment interest.
21. Mrs X disputed the Council’s comments and asked for her complaint to be considered further. She maintained that but for the Council’s failings she would not be in this position. Mrs X states she was not complaining about the Liability Notices, but the guidance given in the covering letter. The Council reiterated it was satisfied it had discharged its duties in connection with the CIL and that officers had acted appropriately.
22. As Mrs X remains dissatisfied, she has asked the Ombudsman to investigate her complaint. Mrs X believes the Council should grant a retrospective exemption from the CIL liability. If this is not possible, she suggests that as a compromise, the liability is settled in full, but without interest, when the property is sold.

Analysis

23. It is unfortunate that Mrs X now faces a large CIL bill, but there is no evidence this was due to fault on the part of the Council.
24. It was clear from the planning permission that the property Mrs X intended to build was a chargeable development liable to pay CIL. There is no evidence the Council informed Mrs X she would automatically be exempt from the CIL.
25. The Liability Notice sent to Mrs X in 2016 sets out the amount to be paid and stresses the need to submit a Commencement Notice before commencement of development. It also confirms the liability has been registered as a local land charge against her land, which will be cancelled on full payment. In addition, the Notice states:

“Are you eligible for relief from CIL?

If you are a charity, are constructing a self build home, annex or extension, or intend to use the development for social housing you may be eligible for a reduction (partial or entire) in this CIL liability. Please see the guidance published by the Department for Communities and Local Government for more information.”

26. I do not consider the covering letter, or the Notice were misleading. It is clear from the letter that the CIL relates to Mrs X’s proposed development and that the full charge will be payable if Mrs X does not follow the correct process. Neither the letter nor the Notice suggest Mrs X’s development is exempt from CIL or that no further action is required. The Notice makes it clear that Mrs X would need to claim a reduction/ exemption. This is not automatically granted.
27. Even if Mrs X had applied for, and the Council had granted an exemption, she would still have needed to submit a CIL Commencement Notice before development commenced. It was open to Mrs X to contact the Council, or her agent, if she was unclear how to apply for an exemption, or to ensure the appropriate forms had been completed.
28. The Regulations state the Council must issue a Liability Notice on the applicant, the person who has assumed liability to pay CIL, and the landowner. Mrs X considers the Council should also have sent a copy of the Liability Notice to her agent but there is no requirement to do so. Nor is there a requirement to send a reminder.
29. The Regulations also set out how payment of the CIL should be made. Where development has commenced, but the council has not received a commencement notice, it sets a deemed commencement date, and must issue a demand notice requiring the CIL to be paid in full. In addition, the Regulations state the Council must charge late payment interest at an annual rate of 2.5% above bank of England base rate.
30. The Council has offered to agree a repayment plan with Mrs X, but is required to charge interest.

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Final decision

31. There is no evidence of fault in the way the Council has made Mrs X liable and sought to recover the CIL due on her property.

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Investigator's decision on behalf of the Ombudsman