How does CIL differ from section 106?
A section 106 obligation is negotiated, site-specific, and has to satisfy the three tests in regulation 122 of the CIL Regulations 2010: necessary to make the development acceptable in planning terms, directly related to the development, and fairly and reasonably related in scale and kind. CIL is none of those things. It is a tariff applied by formula to whatever the charging schedule sets, and it is not reduced because a scheme is marginal. The two run alongside each other, so a site can carry both, with section 106 covering what the tariff does not.
How is the charge calculated?
The charge is the rate in the charging schedule, expressed in pounds per square metre, applied to the net additional gross internal floorspace. Existing buildings can be deducted where they have been in lawful use for a continuous six months within the previous three years, which is often the difference between a viable conversion and an unviable one. Rates are indexed annually against the RICS BCIS All-in Tender Price Index, so the figure printed in a schedule adopted several years ago is not the figure that will be charged. Schedules also vary rates by zone and by use, so two sites in the same district can face very different charges.
When does CIL fall due?
The authority issues a liability notice once permission is granted. Someone must then assume liability, and a commencement notice must be served before work starts. Payment falls due on commencement, subject to any instalment policy the authority has adopted. Missing a procedural step carries consequences that do not depend on intent: surcharges, loss of the right to pay by instalments, and loss of any exemption that had not been formally granted beforehand.
What exemptions and reliefs exist?
Development under 100 square metres that does not create a dwelling is not liable at all. Beyond that there is relief for social housing and charitable development, and exemptions introduced in 2014 for self-build homes, residential annexes and extensions. Each has to be applied for and granted before development commences. Someone who qualifies on the merits but starts work first loses the exemption, and the full charge becomes payable.
What is changing?
The Infrastructure Levy legislated for in the Levelling-up and Regeneration Act 2023 was to have replaced CIL. Government confirmed in July 2024 that it would not be taken forward, so CIL and section 106 continue as they are. On 25 June 2026 the Minister of State for Housing and Planning wrote to CIL charging authorities about the exemption cases described above, saying government intends to consult on targeted amendments to the CIL Regulations so that qualifying householders and self-builders are not caught out by procedural error, and reminding authorities of the discretion they hold over enforcement in historic cases. That consultation had not been published at the time of writing.
Common questions
Last updated 24 July 2026.