Property tax specialists have hit out at planning laws after saving a client more than £20,000 in a recent appeal win.
E3 Consulting successfully overturned a Community Infrastructure Levy (CIL) notice for £22,089 issued by a local council in Surrey to a farmer-owner for her property.
It related to planning applications for change of use of an ancillary outbuilding into a new independent property for letting and a separate retrospective permission for repair works to fix storm damage.
A Valuation Office Agency (VOA) inspector agreed with E3 Consulting’s submissions and ruled that no CIL was payable in the case.
CIL is a ‘tax’ applied to certain new developments and used by many local planning authorities pursuant to the Planning Act 2008, Part 11 to fund vital infrastructure although there are exemptions and reliefs allowed – but only if gained before work starts on site.
Alun Oliver FRICS, Managing Director of Southampton-based E3 Consulting, said: “CIL is a complex and inflexible tax which seems almost designed to confuse.
“It is incredibly rare to win a case at appeal but we are grateful that the VOA’s District Valuer agreed that the local planning authority had erred in issuing a CIL liability notice for what was a considerable sum of money, and decided in favour of our client.
“Many other people, especially homeowners, self-builders and many small and mid-tier developers, have not been so fortunate.
“Many will have received large bills out of the blue with no idea that they were liable with little or no advice from their architects or planning advisers.
“By then the chance to claim relief or an exemption has gone – as too is their right to appeal. The lesson is to get expert advice at an early stage and before any work starts.”
Most new developments which create net additional floor space of 100 square metres or more, or create a new dwelling, are potentially liable for CIL, where the Local Planning Authority (LPA) has adopted the levy.
Self-build flats and houses are potentially exempt – along with residential annexes and even extensions to the family home – but there are strict criteria and rigid procedures to follow.
Alun said that it’s best visualised as a game of snakes and ladders, but with lots of snakes and only one or two ladders – albeit very costly and serious outcomes.
In the appeal win, E3 Consulting was able to demonstrate that the outbuilding had been in continuous use for at least six months and no extra floorspace had been created.
The client, who does not wish to be named, said: “It has been a complete nightmare but I am thrilled that, against the odds, we have finally won.
“There’s been a great emotional, physical and financial cost, which I would hate for anyone else to go through.
“I do feel this is an important precedent for other homeowners and farmers seeking to diversify their income to stay viable in these turbulent times.”
She added: “Alun said from our very first conversation that the CIL liability was incorrect, on the grounds ultimately validated by the appeal decision.
“I would urge anyone considering a project in an area that has adopted CIL to take early specialist advice. I only wish I had instructed E3 earlier as we might have short-circuited some of the loops and anxiety in resolving this matter.”
The Valuation Office Agency ‘appointed person’ was District Valuer Victoria Briggs and the appeal was granted in September 2021.
E3 Consulting has offices in Bournemouth, Southampton and London.
It provides specialist property tax advice to owners, investors and occupiers of UK real estate. The business advises on Capital Allowances, Community Infrastructure Levy (CIL), Land Remediation Relief and Repairs and Maintenance. Alun, as a CEDR accredited Mediator regularly undertakes independent reviews and expert reports to mitigate CIL, wherever possible within the context of the CIL Regulations.