Community Infrastructure Levy
How do householders lose CIL exemptions?
Short answer
Position at 29 September 2026. Householders who qualify for a CIL exemption can still lose it on timing. The trap that still costs the whole levy is work starting before the council has received and granted the claim: a claim must be received before commencement, and it lapses if work starts before the council decides it (CIL Regulations 2010, regulations 42B and 54B).
Where the liability notice was issued on or after 1 September 2019, a missed commencement notice no longer loses an annex or self-build exemption in England; it brings a surcharge instead (regulation 83(1A)). On 25 June 2026 the Minister of State for Housing and Planning wrote to charging authorities saying the government is proposing to consult on changes to stop eligible householders facing charges for procedural errors. At the date of this review the law has not changed.
The traps
| Trap | Applies to | Rule | Result |
|---|---|---|---|
| Claim not received before work starts | Extension, annex, self-build | 42B(2)(a); 54B(2)(b) | No exemption; full CIL |
| Work starts after the claim is sent but before the decision | Extension, annex, self-build | 42B(3); 54B(3) | Claim lapses; full CIL |
| Self-builder claims without first assuming liability | Self-build | 54B(2)(a)(ii) | Claim not valid |
| No commencement notice before work starts | Annex, self-build | 67(1); 83(1A) | Surcharge of 20% of the CIL otherwise due, or £2,500 if lower; exemption kept where the liability notice was issued on or after 1 September 2019 |
| Form 7 Part 2 not sent within six months of the compliance certificate | Self-build | 54C(2); 54D(2)(b), (5), (6) | At least 28 days' warning; the exemption is withdrawn unless Part 2 arrives in that time |
| Self-build home sold or let, or annex let or sold separately, within three years | Annex, self-build | 42C(2); 54D(2) | Exemption withdrawn; notify within 14 days |
| Work departs from the permission and is regularised by retrospective permission | All | Regulation 7(5)(a); guidance paragraphs 047a and 047b | Treated as commencing on the day that permission is granted; no exemption available |
"Work starts" means the first material operation, as defined in section 56(4) of the Town and Country Planning Act 1990: construction, demolition, digging a foundation trench, or laying a main or pipe to the foundations (regulation 7). The details for each exemption are in CIL on an extension and the self-build exemption.
What changed on 1 September 2019
The Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2019 (SI 2019/1103) removed the rule that a person granted an extension, annex or self-build exemption "ceases to be eligible" if no commencement notice is submitted before work starts (the former regulations 42B(6) and 54B(6)). In its place, regulation 83 now requires a surcharge.
Subject to paragraph (1B), where a relevant development is commenced before the collecting authority has received a valid commencement notice in respect of the development, then instead of any surcharge which may be imposed under paragraph (1) the collecting authority must impose a surcharge equal to 20 per cent of the notional chargeable amount or £2,500, whichever is the lower amount.
Three details matter:
- The date of the liability notice decides which rule applies. The change applies where the liability notice, or a revised liability notice, was issued on or after 1 September 2019 (SI 2019/1103, regulation 1(4)). For older notices the exemption can still be lost.
- "Must", not "may". The council has to impose the surcharge, unless it would cost more to administer than it raises (regulation 83(1B)).
- Extensions need no commencement notice at all once the exemption is granted (regulation 67(1A)(aa)).
Some council web pages still describe the pre-2019 rule. The Regulations govern.
What has not changed
The claim itself must still arrive, and be decided, before work starts. That rule has applied since the exemptions were introduced in 2014, and the 2019 amendments kept it. It is the one that produces full CIL bills for people who would otherwise have qualified.
A claim under this regulation will lapse where the chargeable development to which it relates is commenced before the collecting authority has notified the claimant of its decision on the claim.
What the June 2026 letter says
On 25 June 2026 Matthew Pennycook MP, Minister of State for Housing and Planning, wrote to the leaders of CIL charging authorities in England. gov.uk says it went to the 164 authorities that charge and collect CIL. The letter:
- says the government is aware of historic cases where householders failed to obtain an exemption because of procedural errors, including not applying for, or not receiving, the exemption before starting, and retrospective permission granted after further works had begun;
- says the government is "proposing to consult" on targeted changes to the Regulations so that householders and self-builders who would otherwise be eligible are not faced with unexpected charges for procedural errors in future, and is working to publish the consultation "as soon as possible";
- says the new regulations will only apply once they come into force;
- recommends that authorities review their local CIL guidance and how they communicate the exemptions;
- reminds authorities that they have a duty to collect CIL that is due and discretion over what enforcement steps to take and when, and that escalated action such as threats of forced sale or criminal proceedings is not required by the Regulations without regard to their wider legal obligations;
- says authorities can make ex gratia payments from their general funds in exceptional cases where CIL has been paid, which would not be a waiver or refund of CIL, and that they should take their own legal advice.
When we checked gov.uk on 28 September 2026 we could not find the consultation published. Nothing in the letter changes the Regulations.
What this means for you
Until any new regulations are in force, treat the order of events as fixed: claim, wait for the written decision, send any commencement notice, then start. If you have already lost an exemption on procedure, the letter gives councils room to consider enforcement timing and, exceptionally, an ex gratia payment. It gives you no right to either.
Parallel prepares planning applications for extensions, annexes and new homes. This page is a summary of the law at the date above, not advice on a particular CIL liability.
Sources
- CIL Regulations 2010, regulation 42B: extension and annex exemption procedure legislation.gov.uk
- CIL Regulations 2010, regulation 54B: self-build exemption procedure legislation.gov.uk
- CIL Regulations 2010, regulation 67: commencement notice legislation.gov.uk
- CIL Regulations 2010, regulation 83: surcharge for failure to submit a commencement notice legislation.gov.uk
- The Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2019, SI 2019/1103 legislation.gov.uk
- Letter from the Minister of State for Housing and Planning, 25 June 2026: Household Developer Exemptions gov.uk
- Community Infrastructure Levy charges on householders: letter to local authorities gov.uk
- Planning practice guidance: Community Infrastructure Levy, introduction and paragraphs 047a and 047b gov.uk