Mandatory charitable relief

Where a collecting authority is unable to recover an amount of CIL from a party who assumed liability for the levy the collecting authority may transfer the liability to the owners of the relevant land in question including charities which own an interest. This is known as ‘default of liability’ – see Regulation 36 for details. A collecting authority may only transfer the liability after it has taken all reasonable efforts to recover the outstanding amount.

Where the outstanding amount is defaulted in this way, it will be apportioned between the owners of the relevant land according to their material interest in the relevant land (‘material interest’ is defined in Regulation 4(2)).

A charity benefiting from discretionary charitable relief may be liable to pay a share of the outstanding amount based on its material interest in the land. In order to manage the risk of a default of liability by another party, charities should carefully select development partners and make appropriate contractual arrangements to safeguard their interests.

A charity receiving a mandatory charitable exemption (under Regulation 43) will continue to be exempt from any liability to pay the outstanding charge.