Two important points in the context of CIL have been decided by Mrs Justice Lieven in R (oao Stephen Luck) v Bracknell Forest BC [2025] EWHC 2984 (Admin). These are:
(i) a disqualifying event for the purposes of self-build housing exemption can occur before the practical completion of the new dwelling; and
(ii) the power to withdraw a liability notice conferred by regulation 65(7) of the Community Infrastructure Levy Regulations 2010 is an administrative power and not a power which can be exercised to extinguish an otherwise valid CIL liability.
Subject to consideration of the point by the Court of Appeal at some time in the future the first point puts to bed arguments to the contrary that are raised from time to time whilst the second point is of wider significance but may be changed by legislative changes under consideration but as yet not announced. The decision also has wider significance as regards successive developments on the same site.
This CIL exemption can be lost after commencement of the self-build project if “a disqualifying event occurs before the end of the clawback period” (reg. 54D(1)). The definition of “clawback period” for this exemption is “the period of three years beginning with the date of the compliance certificate relating to the relevant dwelling” (reg. 2(1)).
In this case the self-build development had commenced after the grant of the exemption. The development involved the construction of a new five bedroom house and the conversion of an existing outbuilding into an annex. Work was caried out to the outbuilding and Mr. Luck moved in. A trench was dug and then work stopped. The site was then sold and Mr. Luck moved to an adjacent site and permission for a new self-build housing project was obtained in respect of that adjacent site along with a new exemption. The purchaser developer obtained planning permission for two new houses on the original site and the outbuilding was demolished which meant that the original self-build housing development could no longer be carried out. A CIL charge arose in relation to the developer’s new development.
Bracknell Forest BC (“the Council”) served two demand notices - one for £334,478.27 (the CIL which would have become payable on commencement if there had been no exemption) and one for £2,500 which I anticipate was a surcharge for not notifying a disqualifying event (reg. 84).
By judicial review Mr. Luck challenged firstly the decision to issue the demand notices and secondly the decision to both refuse to withdraw them and to refuse to not enforce the CIL. The ground for the first challenge was that the sale had not taken place within the three year period beginning with the issue of the certificate of practical completion. As it had not occurred during the clawback period it was argued that the sale was not a disqualifying event. As no certificate of practical completion had been issued the second stage of compliance in regulation 54C had not been triggered. Thus no CIL had fallen due under regulation 54D(3).
The judge accepted the Council’s arguments that a disqualifying event does not have to occur during the clawback period but rather before the end of that period. Consequently it can occur before the start of the clawback period.
This is an important point as a number of self-build projects have ceased before completion and then sold on. The person entitled to the benefit of the exemption will be liable for the CIL falling due as a result of the sale and not the purchaser. However, if the person liable to pay the CIL defaults the collecting authority can transfer the liability to the purchaser under regulation 36 provided the authority has used reasonable efforts to enforce payment using one or more of the statutory methods of enforcement. In addition the site will be subject to a local land charge (reg. 66).
The second ground of challenge relied on was that the Council was wrong to consider that it did not have a discretion to waive the CIL liability by exercising the power in regulation 65(7) to withdraw the liability notice. There has been considerable public debate in some areas concerning the ability of collecting authorities to waive unexpected CIL bills.
The cases mainly fall into one or other of two classes of case. One class is when a householder or self-builder has failed to properly comply with the strict requirements attached to the exemptions for residential extensions and self-build housing projects. It is expressly provided that such failure will cause the loss of the exemption and there is no express power for the collecting authority to waive or modify such compliance unless the argument as to the scope of regulation 65(7) is correct.
The other class is when a householder or self-build has failed to comply with a planning condition attached to the permission and obtains a retrospective planning permission to remedy the breach. This then results in a significant but unexpected CIL bill as retrospective planning permissions cannot benefit from CIL exemptions. As regards self-build housing exemptions this was confirmed by the Court of Appeal in R (oao Gardiner) v Hertsmere BC [2022] EWCA Civ 1162 and as regards social housing relief by Lang J. in R (oao Heronslea) v SSCLG [2022] EWHC 96.
The unexpected CIL bills have resulted in strong pressure for collecting authorities to waive them. One of the arguments put forward as in this case is that the collecting authority can waive a CIL liability by withdrawing the liability notice and there has been resentment at the failure of most authorities not to accept that.
This decision is, therefore, an important one in the context of the current disquiet over the issue. Lieven J held that regulation 65(7) does not confer a broad discretion to waive CIL because
(i) collection of taxes - a tax collecting authority is not to be expected to have power to waive tax that has been set by Parliament. It has been long established that the Inland Revenue as manager of the tax system does not have a dispensing power (R v CIR ex parte National Federation of Self-Employed and Small Businesses Limited (1980) 55 TC 133).
In R (Wilkinson) v IRC [2003] 1 WLR 2683 the question was whether an allowance expressly limited to widows could be claimed by a widower. Lord Phillips MR stated at paragraph 46 that
“No doubt, when interpreting tax legislation, it is open to the Commissioners to be as purposive as the most pro-active judge in attempting to ensure that effect is given to the intention of Parliament and that anomalies and injustices are avoided. But in the light of the authorities that we have cited above and of fundamental constitutional principle we do not see how section 1 of the TMA can authorise the Commissioners to announce that they will deliberately refrain from collecting taxes that Parliament has unequivocally decreed shall be paid, not because this will facilitate the overall task of collecting taxes, but because the Commissioners take the view that it is objectionable that the taxpayer should have to pay the taxes in question.”
Applying this In GL v CIR [2023] 1WLR 4481 Deputy Upper Tribunal Judge Burley KC stated pertinently for this case “that HMRC must not take upon itself the power to decide whether particular conditions laid down by Parliament are just or unjust” (para. 42).
In her judgment Lieven J. cited the decision of Butcher J. in R (oao Clamp) v HMRC [2022] 1 WLR 1067 who applying the Wilkinson decision stated “HMRC cannot properly, however, make concessions that tax should not be payable, where this is done not to facilitate the overall task of tax collection but because they consider that a tax which Parliament has clearly imposed should not as a matter of principle or policy or by consideration of equity, be payable.”
The learned judge considered that this applied with greater strength to a local authority administering CIL. As with the Inland Revenue it is an important constitutional point.
(ii) the CIL regime – amongst the points that the judge drew from previous Cil decisions were (para. 53):
(a) CIL is akin to a tax
(b) the purpose of CIL is “to provide funding for necessary development, and to provide certainty to developers and the collecting authority as to when and how such liability arises applying dicta of Lang J. in the Heronslea case supra (para. 120).
(c) it forms a “detailed statutory code which is self-contained and carefully constructed” applying dicta of Sir Keith Lindblom in R (oao Gardiner) v Hertsmere BC [2022] EWCA Civ 1162 (para. 45). The judge later described the CIL regime as “a very detailed and comprehensive scheme for CIL as a whole and the self-build exemption specifically” which is a reason to be “very cautious about reading words or conditions or limitations into the Regulations that do not appear on their face” (para. 109).
(d) the “imposition of CIL is not discretionary” applying dicta of CMG Ockleton sitting as a Deputy High Court Judge in R (oao Shropshire Council) v SSCLG [2019] EWHC 16 (para. 44).
(e) The procedure in regulation 54B (procedure for self-build housing exemption) is a strict procedure following the Gardiner decision (para. 57);
(f) The CIL liability must be precisely and reliably calculated on an objective basis (Gardiner decision – para. 63).
It had been stressed on behalf of Mr. Luck that the statutory purpose of the self-build exemption is to encourage self-build housing and not place barriers in its way (para. 66). Due to the detailed statutory scheme in the Regulations the judge reformulated this purpose as one “to encourage self-build housing, but within the clear parameters of that detailed scheme” (para. 116).
It had been argued on behalf of Mr. Luck that it was unfair and absurd and constituted double recovery of CIL to allow CIL to be charged on both the failed self-build housing development and the developer’s new two house development. This argument was put forward to justify both grounds for the application. It was rejected by the judge for two reasons.
The first is that the CIL regime caters for such a possibility. It is possible to abate the CIL arising from the later development using the CIL paid in relation to the first development under regulation 74B. Mr. Luck could have transferred liability to the developer to discharge the liability on the first and use it to abate the CIL on the second development. Alternatively Mr. Luck could have paid the CIL liability on his development and in the sale contract provided that the developer paid to him the extent of any abatement of the developer’s CIL liability.
Second and more generally the judge stated that the “mere fact that there is some double recovery does not lead to a conclusion that the Regulations have to be read in a different way” (para. 120). ). This serves to emphasise that with the CIL regime certainty is the paramount objective and as stated by Sir Keith Lindlom in the Gardiner case supra there is no equity about a tax (para. 49) or as stated by Butcher J. in the Clamp case supra “HMRC cannot properly, however, make concessions that tax should not be payable, where this is done not to facilitate the overall task of tax collection, but because they consider that a tax which Parliament has clearly imposed should not as a matter of principle or policy, or by reasons of considerations of equity, be payable” (para. 41). It means that the CIL regime is not capable of being subjected in the courts to examination as to whether or not it operates in a fair manner or in accordance with equity. Those are matters for Parliament to decide.
The Council did inform Mr. Luck that although it considered that it did not have a power to extinguish the CIL liability if it did it would not exercise it in his favour due to the circumstances of the case, Mr. Luck’s ability to have avoided this outcome and the need for a consistent and fair approach in the application of CIL. The judge considered that if contrary to this decision the Council had had such a discretion then it was entitled to refuse to exercise it.
Separate from the issue of whether a collecting authority has a power to extinguish a CIL liability there is an issue as to the extent to which a collecting authority may decide not to enforce a CIL liability. The two are not the same. It is accepted in the tax cases that the Inland Revenue has a wide managerial discretion “as to the best means of obtaining for the national exchequer from the taxes committed to their charge, the highest net return that is practicable having regard to the staff available to them and the costs of collection.” (Lord Diplock in the National Federation of Self-Employed and Small Businesses supra at page 163H).
This was expanded on by Lord Wilson who having citing that passage from the judgment of Lord Diplock went on in R (Davies) v HMRC; R (Gaines-Cooper) v HMRC [2011] 1 WLR 2625 to say “In particular, the revenue is entitled to apply a cost-benefit analysis to its duty of management and in particular, against the return thereby likely to be foregone, to weigh the costs which it would be likely to save as a result of a concession which cuts away an area of complexity or likely dispute." (para. 26).
This discretion was not considered in the Luck case. It was stated on behalf of Mr. Luck that the Council had conceded that there is a discretion as to the method of enforcement to be used (para. 1010) but that does not really add anything to the consideration of the issues in that case. The judge stated that it is at the stage of actual enforcement that issues around alleged hardship might become relevant (para. 102). In the Luck case that stage had not been reached. This is covered by the CIL regime. When considering an application for a charging order (reg. 103) or for consent to enforce a local land charge (reg. 107) the Court is required to take into account all the circumstances of the case and whether any third party will be unduly prejudiced (reg. 104 and 107(5)). With applications for a charging order it is expressly provided that the circumstances of the case include the personal circumstances of the debtor (reg. 104(1)(a)) but that is not repeated in regulation 107(5).
(i) a disqualifying event at any time prior to the date at which the clawback period expires will cause CIL to become payable which was previously exempted.
(ii) Specifically a disqualifying event occurring before the completion of a new self-build dwelling will cause CIL to be payable. This can be a sale but it could be the carrying out of a different development making the self-build housing development impossible.
(iii) the problem for Mr. Luck could have been mitigated by using the transfer of liability facility in regulation 32 and the abatement provision in regulation 74B.
(iv) this serves to emphasise the important role abatement plays in the CIL regime. The ability to abate is hedged around with a number of strict limitations. It is a subject which needs to be understood when dealing with successive developments on a site.
(v) unless overturned at some time by the Court of Appeal the power to withdraw a liability notice under regulation 65(7) does not confer on a collecting authority a unilateral power to extinguish an otherwise enforceable CIL liability.
(vi) there is no scope for the introduction of tests of fairness or equity when construing the CIL regime.
(vii) if there are to be changes then that is a matter for Parliament and not individual local authorities. It is not within the power of collecting authorities to remove unexpected CIL bills. That is a matter for Parliament. This is under consideration but the nature of the changes have not been announced as yet but may be shortly.
(viii) the absence of a power on the part of a collecting authority to extinguish a CIL liability does not mean that a collecting authority is compelled in all cases to compel payment of CIL in accordance with the CIL regime. This aspect was not discussed in the Luck case but it is to be anticipated that a collecting authority will be regarded as having a managerial ability akin to that of the Inland Revenue enabling it to decide not to enforce to the fullest extent if to do so would involve more being expended in enforcement than is recovered.
(ix) consideration of hardship by the courts comes when a collecting authority seeks to pursue enforcement methods such as seeking a charging order or consent to enforce a local land charge and not before that stage.
(x) although not an issue in this case it serves to emphasise that the strict pre-conditions attached to CIL exemptions and reliefs need to be complied with and failures cannot be disregarded by collecting authorities.
(xi) the decision further serves to emphasise that the CIL regime is a comprehensive code which is to be applied and administered without the implication of qualifications or provisions. In particular successive CIL charges arising from successive developments on a site are to be dealt with by the express provisions such as the abatement provisions in regulation 74A and 74B. If abatement is not sought or has been lost or does not limit the full C liability to the amount of a single CIL charge then double recovery as it was described on behalf of Mr. Luck is the outcome under the CIL regime.
(xii) the paramount lesson that this decision drives home is the importance of considering CIL consequences before acting with regard to a development whether it is the commencement of one or switching to a different development part way through. To act without doing so often leads to a very heavy CIL bill. To act without knowledge is to gamble.
This article was originally published by Local Government Lawyer on November 28th 2025.