Decision

CIL Appeal 1867784 – 23 Oct 25 (accessible HTML version)

Published 3 December 2025

Appeal Decision

By redacted BA Hons PG Dip Surv MRICS

an Appointed Person under the Community Infrastructure Levy Regulations 2010 as Amended

Valuation Office Agency
Wycliffe House
Green Lane
Durham
DH1 3UW

e-mail: redacted@voa.gov.uk

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Appeal Ref: 1867784

Planning Permission Ref. redacted

Proposal: Prior Approval for change of use from Use Class E to residential use providing 46 self contained units with parking and cycle and refuse storage.

Location: redacted

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Decision

I determine that the Community Infrastructure Levy (CIL) payable in this case should be £0 (NIL). 

Reasons

1. I have considered all of the submissions made by redacted , on behalf of redacted (the Appellant) and by the redacted, the Collecting Authority (CA) in respect of this matter.  In particular I have considered the information and opinions presented in the following documents:-

a) Prior Approval decision in respect of redacted issued on redacted;

b) Notice of Chargeable Development dated redacted

c) CIL Liability Notice redacted dated redacted;

d) The Appellant’s request for a Regulation 113 review dated redacted ;

e) The CA’s Regulation 113 review dated redacted;

f) The CIL Appeal Form dated redacted submitted by the Appellant under Regulation 114, together with documents and correspondence attached thereto;

g) Representations from the CA dated redacted; and

h) The Appellant’s comments upon the CA’s representations, dated redacted.

Background

2. The subject chargeable development proposes for the change of use from Use Class E (offices) to residential development (C3) under Class MA Part 3 Schedule 2 of the Town and Country Planning  (General Permitted Development)(England) Order 2015 (PDR).

3. I understand the property was previously occupied by the redacted as offices up until the end of redacted when they vacated. It is noted that redacted, the redacted advised the Appellant in redacted, that the building continued to be used for storage purposes ancillary to its office use. redacted  also stated that between redacted to redacted the building was occupied by redacted and the redacted and that business rates continued to be paid.

4. The Appellant purchased the property from The redacted and redacted on redacted. The purchase completed after the Appellant applied for Prior Approval in redacted.  This was approved on redacted and subsequently on the 1redacted, the Appellant submitted a Notice of Chargeable Development.

5. The CA issued Liability Notice redacted on redacted. This states CIL in the sum of £redacted (redacted) is payable. It comprises of a charge of £redacted attributable to the Charging Authority and £redacted attributable to redacted.  It is based upon a chargeable area of redacted square metres (sq. m.) charged at the relevant residential rate for each authority and with the relevant rates of indexation applied.  It is understood that the parties agree the areas and rates adopted here with neither party raising them as a source of dispute.

6. On redacted the Appellant made a formal request to the CA for a Regulation 113 review of the chargeable amount.  The Appellant opined that the chargeable amount should be nil as an “in-use” deduction should have been made and the retained part was to be put to a use that could be carried out lawfully without further planning permission on the day before planning permission first permitted the chargeable development.

7. The CA issued their Regulation 113 review on the redacted in which they maintained that a CIL charge of £redacted was correct.  The CA cited evidence from the police which suggested the property had not been “in-use”.  They also state that in their opinion, the property would not have been able to be used for residential use until a determination had been reached by the council on the Prior Approval, therefore no lawful change of use had occurred.

8. On the redacted the Appellant submitted a Regulation 114 (chargeable amount) appeal.  Within this appeal they assert that the chargeable amount should be nil as the existing floorspace should have been offset having been “in-use” and as the retained part has an intended use that could have been carried out without further planning permission at the relevant date.

9. The Appellant’s grounds of appeal turn on the application of paragraph (6) of Schedule 1 Part 1 and whether a deduction under KR can be made.  The Appellant contends that both KR(i) and KR(ii) apply here and as such the gross internal area (GIA) of the existing buildings should be offset.

10. The CA contend that neither KR(i) nor KR(ii) can be applied in this case and as such the entire redacted sq. m of the development is chargeable.

Net Chargeable Area

11. The CIL Regulations Part 5 Chargeable Amount, Schedule 1 defines how to calculate the net chargeable area based on the following formula:

G_R – K_R – (G_R × E  ÷ G)

where—

G = the gross internal area of the chargeable development;
GR = the gross internal area of the part of the chargeable development chargeable at rate R;

KR = the aggregate of the gross internal areas of the following—
(i) retained parts of in-use buildings; and
(ii) for other relevant buildings, retained parts where the intended use following completion of the chargeable development is a use that is able to be carried on lawfully and permanently without further planning permission in that part on the day before planning permission first permits the chargeable development;

E = the aggregate of the following—
(i) the gross internal areas of parts of in-use buildings that are to be demolished before completion of the chargeable development; and
(ii) for the second and subsequent phases of a phased planning permission, the value Ex (as determined under sub-paragraph (7)), unless Ex is negative, provided that no part of any building may be taken into account under both of paragraphs (i) and (ii) above.

12. The Appellant argues that deductions could be made under either KR(i) or KR(ii) in this case and I have therefore considered these points in turn.

KR(i) deduction

13. KR(i) relates to retained parts of in-use buildings.  “In-use building” is defined in the Regulations as a relevant building that contains a part that has been in lawful use for a continuous period of at least six months within the period of three years ending on the day planning permission first permits the chargeable development.

14. “Relevant building” means a building which is situated on the “relevant land” on the day planning permission first permits the chargeable development. “Relevant land” is “the land to which the planning permission relates” or where planning permission is granted which expressly permits development to be implemented in phases, the land to which the phase relates.

15. The Appellant opines that the relevant period is from the redacted to redacted.  They state that the Council advised them  prior to purchase that the property had been used by redacted  staff, the redacted and redacted during this period.

16. The Appellant has provided a copy of a licence dated redacted.  This states the Council granted a joint licence to the redacted and redacted for an initial period of up to 6 months.  The licence can be terminated at any time by either party with no less than 28 days’ notice in writing.

17. The Appellant refers to redacted email of the redacted in which he states that the property had been in its lawful use as offices for many years and that between redacted and redacted it was used by the redacted and redacted to carry out training exercises. redacted states the redacted regularly occupied the premises and the redacted occupied it weekly.

18. The Appellant highlights business rates were paid throughout and the Council did not consider the property to be eligible for empty rates relief pointing to an email from redacted of the Council dated redacted .  redacted states “ The corporate decision we made as a council was to continue legal and lawful occupation of the existing office use in order to secure the CIL position.”  The Appellant considers redacted  statement relates to a deduction under the Regulations and that by making a conscious decision the Council must have been satisfied the use of the popery would satisfy KR(i) requirements.

19. In response the CA have provided comment upon the Appellant’s submitted evidence.  They opine that the licence between the redacted  and redacted and the redacted does not prove continuous use.  They highlight that the licence states the heating system will not be operational during the licence period and as it starts during winter, this is not consistent with continuous use of the building as an office.

20. The CA argues that the invoice submitted by the Appellant pertaining to the payment of business rates relates to a period before the relevant three year period to be considered and that even though business rates continued to be paid, this does not prove the building had been in continuous lawful use as an office.  Similarly, the CA does not consider redacted statement to prove that the building had been in a continuous lawful use.

21. The CA has submitted an email from an employee of the redacted that states they only occupied the building on average once every other month and not for office use but to train their redacted to search for people inside buildings.  The CA state that the only evidence that proves the use of the building is the email from the occupant and this proves the building was not being used as an office in continuous lawful use during the relevant period.

22. On this point, I find in favour of the CA.  Whilst I consider the advice provided by the Council’s Investment team regarding the CIL position to the Appellant questionable, that is a matter outside of the scope of this appeal.

23. KR(i) requires a continuous lawful use of the building for a continuous six month period during the three years leading up to the chargeable development being permitted.  Paragraph (8) of Schedule 1 Part 1 states “where the collecting authority does not have sufficient information or information of sufficient quality, to enable it to establish that a relevant building is an in-use building, it may deem it not to be an in use building.”

24. The Regulations provide that where planning permission is granted by way of a general consent (that being the case here) planning permission first permits the development on Reg 8. – (7) a) “on the day on which the collecting authority receives notice of chargeable development submitted to it in accordance with regulation 64 in respect of that development;”  From the information provided I understand this notice was received on the redacted.  The relevant period is therefore redacted to redacted.  By this point the redacted  had vacated the building.  The licence allowed the redacted and redacted to use the property but the CA is correct it does not evidence any actual use of the property.  The email response from the redacted unit suggests quite an infrequent use of the property and without any further evidence to support a regular continuous use during this period, I conclude a deduction under KR(i) is not appropriate in this case.

KR(ii) deduction

25. KR(ii) allows for the deduction of, “retained parts where the intended use following completion of the chargeable development is a use that is able to be carried on lawfully and permanently without further planning permission in that part on the day before planning permission first permits the chargeable development”.

26. “Retained part” is defined as  “part of a building which will be –

i. On the relevant land on completion of the chargeable development (excluding new build),
ii. Part of the chargeable development on completion, and
iii. Chargeable at rate R.”

27. The parties agree the subject is a retained part but they disagree on whether the proposed residential use could have been carried on lawfully and permanently without further planning permission on the day before planning permission first permits the chargeable development.

28. In support of their belief that KR(ii) applies, the Appellant explains that in their opinion the residential use of the property could have been carried out lawfully on the day before Prior Approval came into effect and no further planning permission was needed as the Permitted Development (PD) Right granted the planning permission, not the Prior Approval.  They highlight it is the notice of chargeable development that is the trigger within the regulations and Prior Approval was already in place before this notice was submitted.

29. The Appellant refers to the case of Giordano v Camden LBC [2019] in which the court of appeal upheld a KR(ii) deduction when there was an existing planning permission to convert an office block to six flats.   The Appellant points to paragraph 33 of the judgement which Lord Justice Lindblom explains how KR(ii) applies to PD Rights.

30. “It seems clear, therefore, that the requirement in regulation 40(7)(ii) is not that the intended use of the retained parts of the building must match their extant lawful use as it happens to be on the relevant day, but a use that has, by then, been authorised or would in any event be lawful. They are not the same thing. The latter would certainly include an extant lawful use. But it would also embrace – as in this case – a use that can lawfully be carried on in the retained parts of the building under an implementable planning permission granted before, or on, the relevant day, or with the benefit of “permitted development” rights. As Schiemann L.J. said in Waltham Forest London Borough Council (at paragraph 17), when considering the scope of the provisions for the issuing of certificates of lawfulness of proposed use or development in section 192 of the 1990 Act, “[what] either does not require planning permission or has planning permission (either under the GPDO or because of an express planning permission) is lawful”.

31. The Appellant opines that the PD Right itself grants planning permission not the grant of Prior Approval and points to the judgement in Pressland v Hammersmith and Fulham [2016] EQHC 1763 to support their view.  The Appellant states the Pressland judgement means in essence the need for prior approval is no different to the need to discharge a condition.  They go on to argue the need to discharge a condition or obtain prior approval is not the same as requiring further planning permission to be granted.  Residential use could be undertaken at the subject property without requiring further planning permission and as such a KR(ii) deduction is available.

32. The Appellant goes on to explain that even if prior approval was required, this was in place by the time the notice of chargeable development was submitted and in accordance with Regulation 8 (7) planning permission is permitted when the CA receives the notice of chargeable development.

33. In response to this point the CA argue that PD Rights do not constitute an extant and  implementable permission as was identified in the Giordano case.  The CA assert for the planning permission to be implementable, the prior approval needs to have been secured.  They also consider that for the use of the term “lawfully” to describe the use to be carried on in cases of KR(ii) deduction should signify in accordance with conditions attached to a permission. ln the case of a permitted development, this means the requirement to seek prior approval which  operates as a condition on the general grant of planning permission under the GPDO.

34. The CA considers that the Appellant’s interpretation of the Regulations would effectively exempt all changes of use under PD Rights from CIL liability and this is not consistent with the purpose of CIL.

35. The CA point to other CIL appeals where the date of prior approval is taken as a stand in date for when planning permission was granted and note this interpretation avoids the consequence of all PD Rights approved under prior approval for change of use becoming effectively exempt from CIL.

36. The CA states that the proposed development will increase the burden on the local infrastructure and highlights CIL is designed to help deliver the infrastructure needed to support such development  The CA state that to apply a KR(ii) deduction in this case would go against the principles in the Giordano case, i.e. “the funding of necessary infrastructure will be fairly borne.”

37. In response, the Appellant asserts we are required to interpret and apply the legislation that is in place regardless of any intended or unintended consequences.

38. With regards to this point, I find in favour of the Appellant.  KR(ii) states, “for other relevant buildings, retained parts where the intended use following completion of the chargeable development is a use that is able to be carried on lawfully and permanently without further planning permission in that part on the day before planning permission first permits the chargeable development.”

39. In accordance with Regulation 8. – (7) “In the case of a general consent, planning permission first permits development –

a) on the day on which the collecting authority receives notice of chargeable development submitted to it in accordance with regulation 64 in respect of that development.”

40. The notice of chargeable development was submitted on redacted.  The Prior Approval decision was issued on redacted.  Whilst I can see the CA’s point that for the planning permission to be “implementable” as described in Giordano, Prior Approval was required, the facts of this case are, that on the date planning permission first permitted the chargeable development (i.e. redacted), prior approval was indeed in place.  The Appellant had the benefit of an extant and implantable permission as outlined in Giordano  and residential use could be carried out lawfully and permanently without a further planning permission and as such a deduction under KR(ii) should be applied.

Decision

41. Applying the Regulations as written and following the guidance laid out in case law, on the day before planning permission first permitted the chargeable development, the intended residential use was able to have been carried out in the retained parts of the building lawfully and permanently without further planning permission.  I conclude a deduction under KR(ii) is warranted and this reduces the net chargeable area to zero.  I therefore uphold this appeal and determine the chargeable amount to be £0 (NIL).

redacted
redacted BA Hons PG Dip Surv MRICS
RICS Registered Valuer
DVS
23 October 2025