Westminster City Council loses appeal over £255,000 levy charge

A property owner has been spared a bill of nearly £255,000 after successfully challenging Westminster City Council’s attempt to levy the Community Infrastructure Levy on a planning permission variation.

The case, handled by Mishcon de Reya, involved a large property in Westminster that had been used as a House in Multiple Occupation. The client secured planning permission in 2021 to regularise the HMO use, followed by a further permission in 2025 to vary certain conditions attached to the original permission – known as a section 73 permission.

Westminster City Council then issued a CIL bill for almost £255,000. The Community Infrastructure Levy is a charge local councils can impose on new developments to help fund local infrastructure such as schools, roads and parks. Special rules apply when a planning permission changes a previous permission without adding new floorspace.

The Council argued that, despite never having formally issued a CIL notice for the original 2021 permission, it could work backwards, calculate what it would have charged at the time, and use that figure as the basis for its calculation on the 2025 permission.

Mishcon de Reya challenged the bill, arguing that the rules only permit this type of calculation where a formal CIL notice was actually issued for the original permission. The Council admitted no such notice had ever been served. The legal team also pointed out that the 2025 permission involved no increase in the size of the building whatsoever.

The Valuation Office Agency agreed entirely with the appeal, determining that the CIL payable was £0. The adjudicator found that where no liability notice was issued for the original permission, the calculation method for amended planning permissions cannot be used. She also noted that issuing a notice four years after the original permission would not meet the legal requirement to serve it “as soon as practicable.”

Following the judgement, a spokesperson for Mishcon de Reya observed: ‘Property owners and developers increasingly receive unexpected CIL demands, especially following variations to an existing planning permission. This decision demonstrates that such demands are not always correct, and that they can be successfully challenged.’