Since our previous article changes to the Community Infrastructure Levy Regulations ("Regulations") have now been published allowing developers to request Community Infrastructure Levy ("CIL") payments to be deferred and interest to be disapplied and in some cases refunded were yet to be published. The date on which these changes come into force has not yet been confirmed.
The Regulations allow developers to make a deferral request, which if granted, allow the CIL due to be deferred by up to six months. Requests can be made in relation CIL instalments or where CIL is due in full. There are a number of conditions that the developer must satisfy:
- the developer's turnover must not be more than £45m and the developer must be experiencing financial difficulties for reasons connected with Covid-19
- a CIL demand notice must have been issued
- the CIL must fall due within the "material period" – this is the period between the date the amended Regulations come into force until 31 July 2021
- a deferral request must be made no more than 14 days before the CIL payment is due (or as soon as possible afterwards);
The authority has up to 40 days to grant or refuse a request following receipt. If refused the authority cannot impose a surcharge or charge late payment interest for 7 days following refusal of the request. This prevents a developer being penalised where their CIL payment falls due whilst their request is under consideration by the authority.
An authority considering a deferral request can ask the developer for additional information. If the developer fails to provide the information requested within 14 days, the authority may refuse the deferral request.
It will be interesting to see how authorities will apply the requirement for a developer to be in financial difficulties in order to grant a deferral request. It is not clear at this stage what information authorities might expect to see or might request from the developer. Developers will want to ensure that any commercially sensitive information disclosed to the authority remains confidential and is not disclosed as result of a freedom of information request. Indeed, if a developer is in financial difficulties will a deferral of CIL for up to 6 months be sufficient to ensure its survival?