Monday, 4 March 2013

Critical Update No.01

A recent faux pas when calculating CIL tax payments has inspired me to get my head around the topic, heres a brief summary of what you need to know if you want to build in Richmond.
CIL stands for 'Community Infrastructure Levy' and is a tax paid at planning stage to the local authority. There are two types of CIL tax to be aware of…

1. "Boris Tax"

(or The Mayoral CIL tax) is currently in effect and is charged at £50 per square meter, for any residential development in London that is over 100 square meters. The taxes collected will be used to pay for the Crossrail project.

The Mayor of London - Boris Johnson

2. Local Authority CIL tax 

Richmond Council has recently finished consultation over the Local CIL tax. This CIL tax will be used to fund necessary infrastructure projects in the Borough. It is expected to take effect in 2014. The draft proposal divides the Borough into 'High' and 'Low' charging zones. The north east side of Richmond will be the higher charging zone and will be charged £275.00 per sqm, whilst the rest of the Borough (including our beloved Teddington) pays £210.00 per sqm. 

Image taken from Richmond's consultation document

Local CIL tax will be charged on top of the Mayoral CIL tax, so the financial consequences will be significant. However, both taxes will only apply to new development over 100sqm, so we could be seeing a few 99.5sqm extensions in the near future.

Different charges apply for types of development other than residential, and some exemptions will be made for developments used for charitable purposes/social housing. (click here for more info)

Apologies to our client who I accidentally told would have to pay both taxes this year, (some £35,000 more than the actual amount!) You will be glad to hear he survived after the initial shock.

No clients were (significantly) harmed during the making of this blog post. 

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