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The Community Infrastructure Levy (CIL) was introduced as a means of raising cash from developers to fund public projects. However, it is not always welcome to those who have to pay it and, in one High Court case, a shopping centre owner succeeded in overturning a substantial bill raised against it by a local authority.
The owner made two separate planning applications, the first to add a mezzanine floor to a retail store and the second to make external alterations to the building, including new shop fronts. Both planning permissions were granted but the council raised an invoice for £170,900 in respect of CIL.
The owner challenged the demand on the basis that the mezzanine development was exempt from CIL by virtue of Regulation 6(1) of the CIL Regulations 2010 in that the works were purely internal. There was no dispute that CIL could not be applied to the external works if taken in isolation.
The council pointed out that, had both the internal and external works been the subject of a single planning application, there would have been no question but that CIL was payable. It was argued that both developments were in reality part of a single project and that, by submitting two planning applications, the owner had engaged in a device to avoid having to pay CIL.
In upholding the owner's judicial review challenge, however, the Court found that it had not manipulated the system and did not have an ulterior, or illegal, motive in submitting two planning applications. The council's arguments had no basis in law and, if the outcome conflicted with the intentions of those who drafted the Regulations, then it was for Parliament to amend them. The CIL demand was declared unlawful and overturned.