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You haven't really started yet, well anything substantial. Go to the council website and start the ball rolling. Sounds like your neighbour is a great guy! Go through the motions as if you have just started, forget the rest. Council just want the cash

A shed should be straight forward. Have a go your self through council, they will still charge you the same fees if started from scratch, they'll just need to catch up on inspections. How much over the m2 is it? The problem will be the neighbour though, post of the da is to notify...