▶ Managing Community Infrastructure Levy (CIL) Income & Expenditure in Scribe

What is CIL?

CIL is a charge levied by local authorities on new developments in their area in order to raise funds to provide the infrastructure required to support the development. CIL is paid by the developers to the local authority/district council on the commencement of the development and usually in instalments. 

A proportion of the CIL received is then paid over to the parish or town council that is relevant to the area in which the development is taking place. CIL received between 1 October - 31 March must be paid by 28 April and CIL received between 1 April and 30 September must be paid by 28 October. The amount paid is 15% of the total amount received although this is subject to a cap of £100 per council tax dwelling in the parish area. It can also be more in some instances if a Neighbourhood plan is in place.

Once received, the local council must use CIL for the provision, improvement or maintenance of infrastructure or on anything else concerned with the demands that development places on the area. Examples include the provision of allotments, bus shelters or public toilets. 

CIL must also be spent within 5 years of receipt and the local council should prepare an Annual CIL Report that details the amount of CIL carried over from previous years, the amount received in the year itself and the expenditure to include details and descriptions of items.  Any CIL repaid should also be included in order to show the amount of CIL held at the Year End.

How to Manage CIL in Scribe Accounts

We recommend setting up reserves for CIL received - this can either be a single reserve or if you are likely to receive multiple payments spanning a number of years it may be preferable to set up a reserve for each payment received in order to effectively manage the time frames in which you have to spend this money.  

Cost codes can also be set up for CIL that can then be linked to the reserve(s).  When CIL is received or expenditure is made from CIL funds it should be allocated to the CIL code(s).  If they are linked to a reserve then the balance will automatically be updated.  

1. Set Up Reserves:

1. • Navigate to Menu Setup → Reserves.
   • Click on the "Add Reserve" button.
   • Enter the details of the reserve. Make sure to give it a distinct name for easy identification, such as "CIL 2023 Reserve". You can set up multiple reserves if you are tracking multiple CIL payments.

2. Create Cost Codes for CIL:

•  Navigate to Menu Setup → Cost Codes.
• Click on the "Add Cost Code" button.
• Assign a unique code for CIL income and expenses, ensuring that these codes are linked to the respective reserves you created in step 1.
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3. Track CIL Transactions:

• When you receive CIL income or make expenses from CIL funds, allocate these transactions to the CIL cost codes. If these codes are linked to a reserve, the balance in the reserve will automatically be updated.

At the end of the financial year, the closing balance of the CIL reserve(s) will be the amount to be reported in the Annual CIL Report. You can get details of expenditure by running a "Detailed Cost Centre" report on the CIL cost codes. Any balances remaining in the CIL reserves at the end of the financial year can be transferred to the new year to continue managing the remaining funds.

More information on how to set up reserves can be found here:

▶️ Reserves