Herod loses CIL challenge over office-to-flat conversion

The High Court has dismissed Herod Property Limited’s Community Infrastructure Levy challenge against Westminster City CouncilNationalarchives over the conversion of a Bayswater office property into five flatsNationalarchives. Westminster’s liability notice determined that Herod was liable for CIL totalling £294,959.75Nationalarchives. The developer had commenced work without engaging with the CIL process or providing evidence to establish that retained in-use floorspace reduced the charge to zero.

The judgment distinguishes a developer’s right to rely on the zero-CIL exception from the collecting authority’s subsequent assessment. For development authorised by general consent, the court held that a developer may lawfully decide not to submit a notice of chargeable development if it considers that the zero-CIL exception appliesNationalarchives. The authority’s agreement is not a statutory precondition. The same reasoning applies to the zero-CIL exception from serving a commencement notice.

That decision does not bind the authority. The court held that, once development has commenced without the developer’s notice, the authority must issue its own notice where the small-development and residential-extension exceptions do not apply, even if the developer relies on the in-use deductionNationalarchives. The small-development exemption concerns less than 100 square metres of new build and does not cover development comprising one or more dwellings.

The in-use test requires a relevant building to contain a part in lawful use for at least six continuous months within the three years ending when planning permission first permits the chargeable development. The authority may deem a building not to be in use if it lacks sufficient information, or information of sufficient quality, to establish the testNationalarchives. The court found that Westminster had done enough to perform its collecting functions lawfullyNationalarchives. It was not required to undertake extensive investigations to make the silent developer’s case.

The judge recommended checking the zero-CIL position with the authority before starting work, using plans and supporting evidence. If agreement is absent, developers should voluntarily submit a notice of chargeable development expressly claiming the deduction, supply relevant plans and further information, identify the intended start date and confirm that a commencement notice will follow. They should seek written confirmation of nil liability or a liability notice that can be reviewed and appealed before commencement. An urgent need to start without agreement should be explained to the authority, reserving rights to seek judicial review exceptionally.

A chargeable-amount review must be requested within 28 days beginning with issue of the liability noticeNationalarchives; an appeal must be brought within 60 days beginning with issue of the original noticeLegislation. Commencement generally bars these routes, subject to the exception where planning permission is granted after development has begunNationalarchives. The court would also have dismissed Herod’s judicial review because suitable statutory remedies had been available.

The court held that CIL liability crystallises on commencement, rather than on the issue and service of noticesNationalarchives. Later flat sales did not transfer Herod’s liability to purchasers. Misidentifying the Mayor of London as Transport for London in the notices caused no prejudice and did not invalidate them. A separate surcharge appeal remained undetermined.

The legal basis is the Community Infrastructure Levy Regulations 2010, interpreted in R (Herod Property Ltd) v Westminster City Council [2026] EWHC 2122 (Admin)Nationalarchives.