CIL indexation and outline planning permissions: what developers need to know

The formula uses two index figures to adjust the charge for changes in construction costs over time:

Ic — the index figure for the year the relevant Charging Schedule came into effect.

Ip — the index figure for the year planning permission was granted.

Because construction cost indices tend to rise over time, the date used for Ip matters a great deal. The later the date, the higher the index figure, and the larger your CIL bill. On a major residential scheme, even a few years’ difference can add tens or hundreds of thousands of pounds to the total charge.

On 18 June 2026, the government added a new paragraph 105a to its Guidance. It confirmed that, when calculating the CIL charge for an outline planning permission, the inflation adjustment (called “Ip”) is based on the date the original outline permission was granted and not the date any later reserved matters (i.e. the finer details of the development) are approved.

What prompted the clarification?

Some collecting authorities had been applying a later date, typically the date of reserved matters approval, to calculate Ip. This had the effect of inflating CIL liabilities, sometimes substantially, particularly on schemes where the outline permission was granted several years before reserved matters were submitted. Two appeal decisions earlier this year brought the issue into sharp focus.

In CIL Appeal 1882623 (February 2026), a developer challenged the collecting authority’s calculation of CIL on a 60-dwelling scheme where outline permission had been granted on appeal. The authority had used the reserved matters approval date for Ip. The VOA, determining the CIL appeal, rejected that approach and held that indexation should be fixed at the date of the outline permission.

In CIL Appeal 1878567 (March 2026), the same issue arose on a scheme of up to 46 dwellings. The collecting authority argued for a purposive interpretation under which Ip should reflect the date development was first permitted i.e. approval of the final reserved matter. The VOA again sided with the developer, confirming that an outline planning permission is itself a grant of planning permission, and that later reserved matters approval does not constitute a new permission for indexation purposes.

Both decisions reached the same conclusion: for outline permissions, Ip is fixed by reference to the year the outline permission was granted, not by any later reserved matters approval date. This is the position now confirmed in the government’s Guidance.

What does this mean in practice?

If your collecting authority has calculated CIL using the reserved matters approval date (or any date later than the outline permission), you may have been overcharged. The longer the gap between outline permission and reserved matters, the greater the likely overcharge.

This is especially relevant for large, phased developments where outline permission may have been secured years before later phases come forward for reserved matters approval. On such schemes, construction cost indices can move significantly, and the difference between the correct and incorrect Ip date can translate into a material financial impact.

What should developers do now?

1. Review existing CIL liability notices: Check any CIL demands you have received on outline permission schemes. If the Ip figure is based on the reserved matters approval date rather than the outline permission date, the calculation may be wrong.
2. Act quickly if you disagree. There are strict time limits for challenging CIL calculations. If you believe your liability has been incorrectly calculated, seek a review from the collecting authority or lodge an appeal with the VOA without delay.
3. Factor this into future schemes. When appraising sites and modelling CIL costs on outline permission schemes, ensure your viability assessments use the correct Ip date. This may improve the financial position of schemes that were previously considered marginal.
4. Take specialist advice. CIL calculations can be complex, and the interaction between indexation, phasing, and different types of permission requires careful analysis.

Key take-away

The combined effect of the two appeal decisions and the government’s guidance update is clear: for outline planning permissions, CIL indexation is fixed at the date the outline permission is granted. Developers should not accept liability notices that apply a later date.

Those with existing phased schemes, the Planning team at DMH Stallard LLP can assist in reviewing the CIL position as there may be scope to recover overpayments or reduce future liabilities, depending on the date of any Liability Notice. Contact us via our online enquiry form or call +44(0)3333 231580.