Herod Property Ltd v Westminster City Council High Court – Case Decision

ALUN OLIVER FRICS, Managing Director of Property Taxation Specialists, E³ Consulting, comments upon the recent High Court decision in R (oao Herod Property Limited) v Westminster City Council [2026] EWHC 2122 (Admin).  

The Court dismissed the developer’s application for a Judicial Review (JR) whereby they were seeking to quash their CIL costs of £380,326.30.  This amount comprising unpaid CIL of £294,959.75 plus surcharges totalling £49,387.10 and late payment interest of £35,979.45, calculated from 07 March 2024, on the basis that the development was deemed to have commenced on 06 March 2024.

This ruling is a salient lesson that ‘self-assessment’ can be expensive.  It shows the importance of timely and specialist property tax input to properly understand the CIL requirements, risks, and costs from the complex and convoluted CIL Regulations 2010 (as amended).  The judge, Sir Tim Kerr, attested that “the Regulations are not for the faint-hearted” as many of us grappling with CIL on a daily basis already knew!

This case dealt with the conversion of an office into five residential apartments under Class MA permitted development¹.  The owners, Herod Property Limited (Herod) had acquired the site in January 2021 from Eastern and Oriental that had previously occupied both 32 and 34 Palace Court in Bayswater, London as their UK headquarters, retaining and continuing to occupy 34 Palace Court after the two buildings were separated. 

On 9 March 2022, planning agents for Herod, DP9, submitted a ‘prior approval application’ (reference no. 22/02746/P3JPA) to Westminster City Council (WCC).  WCC granted the application for the change of use on 19 May 2022, subject to four conditions.  Only the first is relevant to this matter: “that the development had to be not merely commenced, but completed within three years from 19 May 2022, i.e. by 18 May 2025”.

On 28 August 2025, WCC issued CIL Liability Notice (ref: LN00006048) to Herod, determining that they were liable for CIL in the total amount of £294,959.75, made up of £253,349.08 Borough CIL (BCIL) for WCC and £41,610.67 for “TFL”.  This latter element should have been annotated as Mayoral CIL (MCIL) for Greater London Authority, not Transport for London (TFL).

Herod challenged the CIL liability maintaining that the building had been in lawful use and thus the net chargeable area was nil and hence zero CIL to pay.  Fatally, Herod had commenced works before their challenge had been properly requested and decided, invalidating any review as detailed within the Regulations.  As well as failing to fulfil the correct CIL processes.  Leading to the challenge and disputed CIL, surcharges and interest on the amounts due.

¹Schedule 2, Part 3 to the Town and Country Planning (General Permitted Development) (England) Order 2015 (inserted by S.I.2021:0418)

There were four distinct grounds that Herod cited for their JR, being:

• Unreasonableness: Failure of WCC to include retained parts of in-use buildings when calculating CIL

• Failure to comply with the CIL Regulations – material interests and apportionment

• Unreasonable decision to issue the notices

• Error on face of [Liability Notice] and [Demand Notice].

The crux of this case was the requirement for ‘permitted developments’ or ‘general consents’ to submit a ‘Notice of Chargeable Development’ – also known as CIL Form 5 - a markedly different process to ‘normal’ planning permissions.  Herod had relied upon Reg.64 applicable to general consents, that states that the requirement to submit Form 5 to the charging authority is reliant on three criteria not applying to the relevant development:

• Reg.42 (the exemption for minor development);

• no CIL is payable because an exemption for residential extensions was granted; or

• the chargeable amount, calculated under regulation 40, is zero.

Taking these in turn, the Reg.42 exemption is not applicable as whilst there was no increase in floor area (measured as Gross Internal Area – GIA) and so below the 100m² threshold, this exemption for minor development is not available where new dwellings are created.  

There were no self-build extension exemptions (Regs.42A-B) in place.  This criterion was not relevant to Herod’s circumstances in any case, as an existing dwelling must be in place for a homeowner to apply for an exemption.

The final option, that the CIL calculation of the chargeable amount resulted in CIL being zero.  Herod (and DP9, as their planning agent) had determined that no CIL applied and so did not submit a Form 5 but crucially did not validate their position with WCC first.  They simply began the construction in the period advised to the Court as between 06 November and 31 December 2023.  Whilst this date was not challenged by WCC during the hearing the case illustrates that the first flat (Flat 6) was sold to Ms Alison Lusher on 14 March 2024 for occupation; not giving much time to complete the relevant construction works.  Furthermore, a quick review of Google Maps indicates that the subject property was covered in scaffolding, protective sheeting and hoarding at street level in February 2022 through to November 2022 and no sign of these in the next image taken in September 2024.  Whilst these do not identify the precise date of commencement, it is for WCC to assess the required amount of late payment interest now due, following the court decision to deny the JR.

The judge dismissed all four grounds, agreeing with the defendant’s ‘more persuasive’ arguments that WCC had no requirement under the regulations to do all the ‘leg-work’ and that the onus of proof lay squarely with the developer to evidence their position.  Herod had failed to submit this to WCC in advance of commencing works.

LPAs can disregard any evidence if they consider it to be insufficient, or of insufficient quality.  An aspect of the CIL Regulations that is frequently overlooked, afforded by Schedule 1, Part 1, 1(8) and (9), which deems the existing building not an in-use building and thus provides no offset.  This results in the higher CIL calculated on the full project GIA.  As the case decision states (at para 90) “Deeming powers of this kind would be red flags to a well advised developer, even one confident its CIL liability should be zero; particularly where the developer decides to refrain from engaging with the collecting authority, decides not to serve a voluntary notice of chargeable development, does not issue a commencement notice and commences development, thereby losing valuable review and appeal rights.”

Interestingly, the second ground sought to apportion any CIL between the developer and the subsequent purchasers of the relevant flats, relying upon Reg.32 that any CIL payable “must be apportioned between each material interest in the relevant land”.  However, Judge Kerr accepted WCC’s position “that liability to pay CIL crystallises on the commencement of development” and that if at that point in time  “no one else has assumed liability, liability falls on those who own the land at commencement”; thus rejecting any apportionment to the owners of the new flats.

The final ground, being that the Liability and Demand Notices had incorrectly stated ‘TFL’ instead of the GLA and Mayoral CIL was held as not material to the overall CIL position, as the incorrect attribution to the intended recipient would not alter the quantum.

The Court also found that, had Herod acted upon the reasonable notices provided by WCC before they started works, they would have had every opportunity to challenge any CIL via the legislative processes Reg.113 and Reg.114.  These would have enabled a statutory review and appeal of the CIL calculation, and thus a Judicial Review should not be a ‘back door opportunity’ where these others had indeed been available, although not utilised.

CIL is a truly complex area of planning law.  We regularly see owners and developers not understanding the nuances of CIL where it differs from planning legislation and coming close to expensive errors.  Sometimes we have been able to help and avert serious issues, occasionally the hole dug by hasty and unrepresented actions is too deep to fully remediate after the fact.

This decision, together with that of R (oao Segrue Investments) v Swindon BC [2026] EWHC 2080 AC-2025-LON-003039, have truly limited the scope for challenging CIL charges - if outside the regulatory processes.  If you have a Liability Notice or Demand Notice, then time is of the essence and any review or appeal must be actioned quickly to ensure you comply with this time-limited challenges – within the respective 28 or 60days.

Procrastination is the thief of time.  Now for CIL, slow action by the developer (or their agent) will also potentially deny the opportunities to challenge the quantum – which could be a catastrophic and expensive path.  Had Herod engaged with WCC in advance, they could have presented sufficient and robust evidence to achieve the designation of the existing use being an in-use building and reduced the net chargeable area to nil and CIL of zero.

Judge Kerr set out at paragraph 91 an eight-step guide to avoiding expensive CIL errors, but the most relevant – and something we advocate as the only option for certainty – is to engage with the LPA before commencing works, to ensure your view aligns with theirs.  If it does not, it is imperative to act quickly and to present strong evidence of your position.  If necessary, undertake the available review and appeal processes before starting works.

E³ Consulting had not acted in this matter, only seeking to provide commentary on what we consider is a pivotal case in the proper administration of CIL and particularly the importance of processing CIL Form 5 (Notice of permitted development) and seeking expert CIL advice in a timely manner and before starting material operations. 

E³ Consulting has advised on CIL since 2014 and is one of the leading firms advising CIL-payers - be they homeowners or developers.  Additionally, we have supported a wide range of advisers including solicitors, planners, architects, funders and project managers on the complexities of CIL.

If you would like to discuss any property tax matters or specific queries relating to the above information, then please do contact the team on 0345 230 6450 or [email protected]. We look forward to speaking with you soon.