Indexing - Public forum - Planning Advisory Service (PAS)
Indexing
Hi All
I know there are at least two threads on this subject, so apologies for starting another one. We adopted CIL on 1st September 2015 and are now trying to understand how to apply indexing. Here are my questions:
1. Timing - do we start applying indexing from 1st Jan 2016 or from the anniversary, ie 1st Sept 2016. Reg. 40 just says 'the year' and the other threads I've looked at suggest this is the calendar year which is a tad perverse in that an LPA adopting on 31 Dec could actually whack a years worth of indexing onto their original rates the very next day!
2. Frequency - do we apply indexing once only and have a new set of rates that hold for the rest of the year (which gives certainty to developers) or do we apply indexing each and every time a liability notice needs issuing. The latter will obviously create variations over the year as the Ip/Ic calculation could be 1.05 this week, but 1.06 next week.
3. Forecast v published figuers - an old chestnut and one I still cannot get a definitive answer on. What is everybody else doing?
All advice truly welcome.
Tim.
Welcome to the nightmare world of CIL indexation!
1. Indexation takes effect at the start of each calendar year not on the aniversery of the adoption of teh C.S.
2. It was intended that indexation is only calculated once for each year and is therefore the same for all applicants.
3. First thing in each new year we look at the BCIS All-In TPI and use the latest forecast figure for the fourth Q of the previous year. It seems that when the DCLG were drafting the Regs. they were misled as to how the All-In TPI was calculated and published!
Thanks Tony
If anybody else is doing the same (or different) please advise as we will undoubtedly go with the general practice.
Tim.
REBECCA STADDON, modified 8 Years ago.
RE: Indexing
Advocate Posts: 103 Join Date: 05/09/13 Recent PostsHi Tim,
We do the same as Tony. Each calendar year has its own index figure.
It is worth noting that you will need to check the level of subscription you have with BCIS as different levels of subscription give you access to different indices.
Rebecca
Thanks Rebecca/Tony
This is helpful, but leads me to ask 2 more questions:
1. In these times of low inflation, there will be some months when the forecast figures go down. Have any developers challenged their liability notice (based on your new annual rate) becuase the forecast figure has actually gone down at the point they get permission?
2. We have already issued some liability notices in 2016 using our original rates because I thought we didn't have to apply the indexing until the anniversary in September. Shall we let these go or withdraw them and reissue a liability notice with the new indexed rate? I think the latter option may cause some battles.
It's all still new to us, so appreciate your continued advice.
Tim.
1. In three years, it's never happened to us. I think that the building industry understands that a single index figure applies for a whole year and any small developers won't understand the whole process anyway! I assume that you are aware that you can't publish the index figures that you use or include them in the L.N. and that they can only be revealed to fellow BCIS subscribers.
2. I think that you are under a duty to apply the correct CIL: sum and therefore you should issue a revised L.N. If the reason is explained, the recipient(s) can't reasonably complain too much.
Thanks Tony
1. Yes I am aware that the indices are fiercely protected. However, once we publish our new rates for 2016 (which I presume we now must) the reader will be able to work out the factor that was created by the Ip/Ic formula even though they will not know what either Ip or Ic were.
2. Oh well, into battle we go - we only adopted on 1st September so I'm sure some will complain that we are applying a whole years worth of inflation after just 4 months. My response will be 'them's the rules and we didn't make 'em'.
All the best,
Tim.
Tony Beckett:Welcome to the nightmare world of CIL indexation!
1. Indexation takes effect at the start of each calendar year not on the aniversery of the adoption of teh C.S.
2. It was intended that indexation is only calculated once for each year and is therefore the same for all applicants.
3. First thing in each new year we look at the BCIS All-In TPI and use the latest forecast figure for the fourth Q of the previous year. It seems that when the DCLG were drafting the Regs. they were misled as to how the All-In TPI was calculated and published!
Hi
I noticed from some of the recently published VO Appeal Decison the following para:
"I am able to agree with the CA that the All-in Tender Price Index for 1 November 2014 had been calculated incorrectly on the Liability Notice and should be revised to 256 as being the figure for 1 November 2014 as published on 1 June 2015. It is well known that the index for a particular date does change as more information becomes available after the date so I do not think that it was unreasonable for the CA to adopt the rate published on 1 June 2015 rather than the 1 November 2014."
Doesn't this mean we now have to check the index regularly for updates, and presumably we must use the most recently published index when calculating Liability Notices?
Has there been any development regarding 'sharing' index information, eg a group of CA's getting together to buy the index and share the knowledge?
Thanks
Paul
Claire Woods, modified 7 Years ago.
RE: Indexing
Enthusiast Posts: 34 Join Date: 19/06/13 Recent PostsHi,
Tony where did you get point 1 above from? I can't find calendar year in the regulations.
Regards
Claire