VAT and your water bill: should you be paying?

By Eleanor Bailey

Did you know? Not everyone has to pay VAT on their business water.

As part of our regulatory requirements, we regularly review our VAT records to make sure that everyone’s categorised correctly. If there are any changes made which will affect your bill, we’ll get in touch to let you know.

We know you might have some questions – so let’s get some verification about VAT!

Here’s a quick guide to all things VAT and SIC Code in the water industry.

First things first…

Do I have to pay VAT on my water bill?

Not necessarily! Whether or not you have to pay VAT (on your clean water supplies) depends on what industry your business is in and your business SIC Code.

It’s industrial businesses in divisions 1-5 of the 1980 edition of the SIC Code list that have to pay VAT (at the standard 20%) on their water. So that’s businesses who work in:

If you’re not in these lines of work – and your business is in divisions 0,6,7,8 or 9 of the 1980 edition of the SIC Code list – then you don’t have to pay VAT on your water.

We mentioned the SIC Code list a few times there. So…

What’s the SIC Code List and what’s a SIC Code?

The Standard Industry Classification (SIC Code) List is what’s used by the Office Of National Statistics to describe the main activity of your business. The list’s split into divisions of industry, and then codes for each individual type of business within those industries.

It’s your SIC Code that decides whether your business pays VAT on water.

In the water industry, the VAT rules say we have to refer to the 1980 edition. That might sound a bit old and fusty – but it’s important to make sure your business is classified according to this list, and not a newer one, to be sure your VAT with us is right.

My water bill VAT has changed – what should I do?

If we’ve updated the SIC Code for your business and this has changed whether or not you pay VAT, you should talk to your company’s accountant or a tax specialist for advice. We can’t give advice on your VAT status or about re-claiming VAT on your VAT return.

If you think the SIC Code for your business is wrong, you can let us know and update your SIC Code by filling in our VAT form and sending it to us at:

Water Plus Correspondence
PO Box 12460
CM20 9PJ

More information

If you’re still struggling to understand SIC codes and whether or not you should be paying VAT on your water bill, find out more here or get in touch and we’ll be happy to help.

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