London Borough of Lambeth v Secretary of State for Housing Communities and Local Government

Under the Community Infrastructure Levy regime, liability to pay CIL arises on commencement of the chargeable development. The date and amount payable are determined by the Regulations and any applicable instalment policy. A Liability Notice and a Demand Notice record and inform the liable person of those matters; they do not create the underlying liability or payment date.

Accordingly, a revised notice may reflect a changed chargeable amount or payment terms, but it does not extinguish liability for CIL, interest or late-payment surcharges already incurred. Regulation 85 permits a surcharge once the specified period has elapsed from the date payment became due. A revised notice cannot reset that statutory timetable.

The claimant, a collecting authority for Community Infrastructure Levy, challenged an Inspector’s decision allowing an appeal by the interested party against late-payment surcharges. The development had commenced, instalments had fallen due and remained unpaid. Various revised Liability and Demand Notices were subsequently issued after changes to the development and the chargeable amount.

The Inspector held that the revised notices superseded the earlier notices and that surcharges could be imposed only after the expiry of the relevant period following the latest notice. The claimant argued that liability and the surcharge power arose independently under the Regulations. The defendant conceded the claim, while the interested party maintained the Inspector’s interpretation. The central issue was whether revised notices extinguished previously accrued surcharge liability.

1. Claim succeeded. The Inspector erred in law in concluding that the claimant lacked lawful authority to impose the late-payment surcharges.
2. The court adopted a purposive approach to the construction of the CIL Regulations, consistent with UBS AG v Commissioners for HMRC [2016] UKSC 13, Barclays Mercantile Business Finance Ltd v Mawson [2004] UKHL 51 and the approach applied to the CIL Regulations in R (Orbital) v Swindon BC [2016] EWHC 448 (Admin).
3. Liability to pay CIL arises on commencement of the chargeable development under Regulation 31(3), with commencement determined by Regulation 7. The amount and payment date are governed by Regulations 69B to 71 and any applicable instalment policy. Regulation 85(1) is engaged when the amount due has not been received after the prescribed 30-day period. Further surcharge powers arise under Regulations 85(2) and 85(3).
4. Liability and Demand Notices have an administrative and informational function. They record the liability, amount and payment arrangements but do not determine when liability arises or when payment becomes due. The court relied on the reasoning in Oval Estates (St Peter’s) Ltd v Bath & North East Somerset Council [2020] EWHC 457 (Admin); [2020] PTSR 861.
5. Regulations 65(8) and 69(5), which provide that earlier notices cease to have effect, do not wipe out accrued CIL liability, interest or surcharges. The contrary construction would allow liability to be avoided through changes to the development, transfer of liability or administrative error. It would also undermine the additional surcharge regime under Regulation 85(2) and (3), contrary to section 218 of the Planning Act 2008.
6. On the facts, the first instalment was unpaid when due, the full amount consequently became payable under Regulation 70(8)(a), and the claimant was entitled to impose a surcharge after the statutory 30-day period. The revised notices merely recorded subsequent changes and did not reset the surcharge timetable.

First-instance judicial review in the Administrative Court. The claim challenged the Inspector’s decision of 5 August 2020 allowing the interested party’s Regulation 117 appeal and quashing the surcharges.