Community Infrastructure Levy: Splitting Operational Works to Create Two Planning Applications

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In March 2016 in the case of R (Orbital Shopping Park Swindon Ltd) v Swindon Borough Council and another [2016] EWHC 448, the High Court held that a Local Planning Authority (LPA) had acted unlawfully in treating two planning permissions as one when charging Community Infrastructure Levy (CIL).

The Claimant, a retail park owner, had made two separate planning applications to the LPA, under the same covering letter. One of the applications was for an internal mezzanine floor, which fell within the regulation 6(1) exemption and the other was for external works to the shops front, that created no additional floor space.

The LPA noted that when looking at these applications individually, neither would trigger CIL liability. The works were however carried out together as one development, with the external works dependent on the internal alterations. If there had been a single application, this would have been subject to CIL. The LPA argued that the Claimant was pursuing a deliberate strategy to avoid CIL. The LPA therefore decided to treat the applications as one, due to their direct link. This resulted in CIL liability of £170,900.

The Claimant challenged the lawfulness of this decision.

The High Court found in the Claimants favour and held that there had been no manipulation of the system by the Claimant for any ulterior and/or illegal motive. The current legislation permitted separate planning applications for each operational development and the Claimant had simply taken advantage of this. The court further stated that if the ability to submit separate applications had not been the legislatures intentions, then it was for the legislature to change it.

The success of the Claimant in this case may result in more developers considering splitting operational works into two planning applications in order to benefit from this statutory loophole.

It is however disappointing news for LPAs and may result in calls for legislative change in the future.

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