CIL and Section 106 Explained: A Complete Guide for UK Planning Applications (2026)
Understanding Community Infrastructure Levy (CIL) and Section 106 Agreements (S106) is essential for anyone submitting a planning application in the UK. These planning obligations can significantly impact development costs, project feasibility, and approval timelines—particularly in London and other high-demand areas.
Whether you are a homeowner planning a house extension or mansard roof conversion, or a developer delivering a larger scheme, understanding how CIL and S106 work is critical to avoiding unexpected costs and delays.
This guide explains everything you need to know in clear, practical terms based on current UK planning policy.
What is the Community Infrastructure Levy (CIL)?
The Community Infrastructure Levy (CIL) is a planning charge introduced under the Planning Act 2008. It allows local authorities to raise funds from new development to help finance infrastructure needed to support growth.
In practice, CIL is a standardised charge applied per square metre of new floor space created by development.
CIL is used to fund infrastructure such as:
Schools and education facilities
Transport and road improvements
Healthcare services
Parks, green space, and community facilities
Local public infrastructure improvements
For most applicants, CIL represents a mandatory financial contribution linked directly to the size of development.
When is CIL required?
CIL is typically payable on “chargeable development”, which includes:
Residential development
New build dwellings
Additional self-contained units
Large residential extensions creating new floor area
Basement conversions and mansard roof extensions (in many London boroughs)
Commercial development
Offices
Retail units
Industrial and warehouse space
Change of use
Where additional floor space is created through conversion or redevelopment.
Important exemptions and reliefs
Some developments may qualify for relief, including:
Self-build housing (mandatory relief if correctly claimed)
Affordable housing (in certain circumstances)
Charitable developments (subject to conditions)
Minor development below the threshold (varies by authority)
⚠️ However, exemptions must be formally applied for before commencement of works. Failure to submit the correct forms can result in full liability being charged.
How is CIL calculated?
CIL is calculated using a simple formula:
CIL liability = chargeable net additional floor area (m²) × CIL rate (£/m²)
Each local authority publishes its own CIL Charging Schedule, meaning rates vary significantly across London boroughs and the wider UK.
In London, most developments are subject to:
Local Borough CIL (BCIL)
Mayoral CIL (MCIL) – used to fund strategic transport infrastructure such as Crossrail
Key factors affecting CIL liability:
Location (borough or charging zone)
Type of development (residential vs commercial)
Existing lawful floor space (offset credits may apply)
Viability assumptions set by the local authority
When is CIL paid?
CIL is not paid at planning approval stage but becomes payable once development is implemented.
Typical CIL process:
Submit CIL Form 1 (Additional Information Form) with planning application
Council issues a Liability Notice confirming estimated charge
Submit Commencement Notice before starting works
CIL invoice issued after commencement
Payment due according to council schedule (often within 60–90 days)
⚠️ Starting development without correctly submitting CIL notices can remove exemptions and trigger immediate full liability plus surcharges.
What is a Section 106 Agreement (S106)?
A Section 106 Agreement is a legally binding planning obligation under Section 106 of the Town and Country Planning Act 1990.
Unlike CIL, which is a fixed tariff system, S106 agreements are negotiated on a case-by-case basis between the developer and local planning authority.
The purpose of S106 is to make development acceptable in planning terms by mitigating its specific impacts.
What can Section 106 include?
Section 106 agreements may require:
Financial contributions
Affordable housing contributions
Education and school place funding
Transport and highway improvements
Public realm or environmental upgrades
Non-financial obligations
Construction management plans
Travel plans for larger developments
Restrictions on occupation or use
Phasing requirements for development delivery
When is Section 106 required?
S106 obligations are typically required for larger or more impactful developments, including:
Major residential schemes
Mixed-use developments
Schemes generating significant infrastructure demand
Developments requiring affordable housing provision
Sites with complex planning constraints
For smaller household developments (such as most extensions), Section 106 is generally not required, although CIL may still apply.
CIL vs Section 106: Key Differences
Understanding the distinction between these two mechanisms is essential for developers and applicants.
FeatureCILSection 106TypeFixed chargeNegotiated legal agreementBasisFloor area (m²)Planning impactFlexibilityNon-negotiableNegotiated with councilPurposeInfrastructure fundingMitigation of development impactApplicabilityMost developmentsLarger or complex schemes
Can CIL and Section 106 both apply?
Yes. In many planning applications—particularly in London—both CIL and Section 106 obligations may apply simultaneously.
However, planning regulations ensure that developers are not charged twice for the same infrastructure item. Authorities must distinguish between:
Strategic infrastructure (CIL funded)
Site-specific mitigation (S106 funded)
Common CIL and S106 issues (and how to avoid them)
Many applicants face avoidable delays and costs due to procedural errors.
1. Late or missing CIL forms
Failure to submit required CIL documentation before commencement can result in loss of exemptions.
2. Incorrect floor area calculations
Misreporting net internal area is one of the most common causes of disputes and reassessments.
3. Starting works too early
Commencing development before formal CIL compliance can trigger full liability and penalties.
4. Misunderstanding demolition credits
Existing lawful floorspace can sometimes offset liability—but only if properly evidenced.
5. Ignoring S106 obligations
Failure to comply with S106 agreements can prevent occupation or lead to enforcement action.
Why CIL and Section 106 matter for planning and development
CIL and Section 106 are not just administrative requirements—they directly affect:
Development viability
Project budgeting and feasibility
Planning approval success
Construction timelines
Legal compliance and risk exposure
For homeowners, particularly those undertaking loft conversions, rear extensions, or mansard roof developments, CIL is often the key financial consideration.
For developers, S106 obligations can significantly influence scheme design, housing mix, and profitability.
Professional guidance on CIL and S106
Planning obligations can be complex, and misinterpretation often leads to unnecessary costs or delays in approval.
Early-stage assessment of CIL liability and Section 106 requirements is strongly recommended as part of any planning application strategy. This is particularly important in London boroughs where both charging regimes are actively enforced and frequently updated.
Final summary
The Community Infrastructure Levy (CIL) is a fixed charge based on development size, while a Section 106 Agreement is a negotiated planning obligation addressing site-specific impacts.
Both mechanisms are fundamental to the UK planning system and play a crucial role in funding infrastructure and managing development impacts.
A clear understanding of both ensures smoother planning approvals, better cost certainty, and reduced risk for homeowners, architects, and developers.
