The Community Infrastructure Levy (CIL) is a discretionary planning charge on new development in England and Wales introduced by the Planning Act 2008. While the underlying calculation can be complex, the more important issue for developers is often when and how that liability is challenged.
Developers can lose important rights to challenge Community Infrastructure Levy liabilities once development begins.
Recent High Court decisions in R (Herod Property Ltd) v Westminster City Council [2026] EWHC 2122 (Admin) and R (Segrue Investments Ltd) v Swindon Borough Council [2026] EWHC 2080 (Admin) underline a practical point for developers: CIL should be dealt with before works commence, not revisited after the event. Getting CIL wrong can be an expensive mistake and recent case law has shown just how important it is for developers to deal with CIL before development begins.
Herod: commencement is crucial
Herod concerned the conversion of an office building into five residential flats. The developer believed that the retained existing floorspace meant that its CIL liability was nil. It did not engage fully with the CIL process on that basis and subsequently commenced development.
Westminster City Council later issued a liability notice requiring payment of almost £295,000, together with surcharges and interest. The developer sought to challenge the Council’s decision by judicial review.
The Court dismissed the claim, which was brought on four separate grounds. In rejecting the first and third grounds (rationality and sufficiency of the collecting authority’s enquiries), Sir Tim Kerr emphasised that commencement is a “watershed moment” under the Regulations because it crystallises CIL liability and generally brings the statutory rights to request a regulation 113 review or bring a regulation 114 appeal to an end.
The Court’s practical message was that a developer should engage with the collecting authority before commencement, provide the evidence supporting its position and, where there is disagreement, use the statutory review and appeal procedures before starting work.
Separately, on the second ground of challenge, the Court confirmed that once CIL liability has crystallised on commencement of development, a developer cannot avoid that liability by subsequently selling parts of the development. The judgment also confirmed that there is no mechanism under the Regulations for transferring a crystallised CIL liability to someone who later acquires an interest in the land.
Segrue: the statutory review and appeal process matters
Segrue concerned the conversion of a former HSBC bank into residential accommodation. The Council issued liability notices totalling approximately £125,275. The developer maintained that it was entitled to an “in-use building” deduction which would reduce the liability to nil.
The Regulations provide a specific route for challenging the calculation: a regulation 113 review must be requested within 28 days, followed, where appropriate, by a regulation 114 appeal within 60 days. Those statutory rights are generally lost once development has commenced.
The developer did not pursue those remedies within the prescribed timeframe. It later obtained further material which it said demonstrated that the building had remained in use and sought to persuade the Council to reconsider the liability under regulation 65(4) and 65(5).
The Court dismissed the claim on three grounds. First, the claimant had a suitable alternative remedy, in the form of the regulation 113 review and regulation 114 appeal process, which it had failed to use within the prescribed time limits. Second, and independently, the judicial review claim itself had been brought out of time. Third, and in any event, the Court held that regulation 65 was not a general second appeal route for evidence that could have been submitted through the statutory review and appeal process.
On the substantive point, the High Court rejected the claimant’s approach. Sir Peter Lane stressed that the Regulations form a carefully constructed and self-contained scheme designed to provide certainty as to CIL liability. Allowing developers to reopen disputes through regulation 65 whenever further evidence emerged would undermine the purpose of the specific review and appeal procedures in regulations 113 and 114. This reasoning, however, was only one of three independent reasons the claim failed; the case is as much a delay and alternative-remedy decision as it is an authority on the scope of regulation 65.
A long-established principle, now reinforced
The importance of these recent decisions can be seen by looking back to R (on the application of Hourhope Ltd) v Shropshire Council [2015] EWHC 518 (Admin).
Hourhope already established the significance of commencement. The developer had challenged its CIL liability but, after commencing development, lost the ability to pursue the statutory review and appeal routes under the Regulations.
The Court nevertheless went on to consider the substantive dispute concerning whether the former public house remained “in lawful use”.
Rather, they reinforce a long-established principle and show the courts applying it with increasing clarity. The Regulations provide specific mechanisms and deadlines for resolving CIL disputes, and developers are expected to use those mechanisms before commencement rather than seek to revisit the position afterwards.
That point is particularly clear in Herod, where the Court described commencement as the point at which important review and appeal rights are lost, and in Segrue, where judicial review was rejected as a means of circumventing the statutory route.
What does this mean for developers?
The practical message is clear. CIL should be resolved before development starts wherever possible.
Before works commence, developers should:
- check how the liability has been calculated;
- identify any deductions, exemptions or reliefs;
- gather evidence of existing use and retained floorspace;
- respond promptly to any liability notice; and
- diarise the deadlines for a regulation 113 review and regulation 114 appeal.
Developers should establish the CIL position at an early stage, identify whether deductions, exemptions or reliefs may apply, and ensure that the evidence required to support the calculation is assembled before works commence.
Where a liability notice is disputed, the relevant deadlines should be treated as critical. A failure to seek a regulation 113 review within the prescribed period, or to pursue a regulation 114 appeal where appropriate, can leave a developer with very limited options later.
The recent cases therefore demonstrate that getting the timing right can be just as important as getting the CIL calculation right. A developer may have a strong argument on the underlying merits, but that argument may be of little practical value if the statutory route for advancing it has already been lost.
For developers dealing with CIL liabilities, particularly where existing floorspace, previous use, exemptions or reliefs are in issue, obtaining advice at an early stage can help ensure that the correct evidence and procedures are in place before development commences.
