Business Water

The business water market is made up of:

Wholesalers – Regionally appointed companies which own and operate the network of water pipes, mains and treatment works. They manage the physical supply of water to your business.

Retail Suppliers – These buy water and sewerage services from the wholesalers, then sell them onto other businesses. They also provide meter reading, billing and customer services.

Before 2017, businesses had no choice but to buy retail supply services directly from their local water wholesaler. However, they are now free to shop around and change retail supplier.

Whilst your water wholesaler and the rates they charge are dictated by region, switching supplier can provide significant savings on your retail service costs and offer a wide range of other benefits.

If you haven’t yet chosen to switch water supplier, then you will be with a default provider based on your location.

You can view the default retail suppliers by wholesale region below:

Your water charges combine wholesale rates (which cover the cost of treating and transporting water and wastewater) and retail supply rates (which cover your service costs).

Your wholesale rates are dictated by region, but you can shop around for the best retail supply rates.

VAT is levied by water suppliers for businesses in specific industries. HMRC’s rules are designed to only charge VAT on water in those industries that use significant volumes of water in their normal economic activities.

​Industries that will be charged VAT at the standard rate on their water bill are:

• ​Chemicals
• ​Construction
• ​Engineering
• ​Manufacturing
• ​Mining
• ​Textiles
• Utilities​

​For all other industries, water charges will be zero-rated.

A water supplier will usually determine the correct VAT treatment for your business by looking up the Standard Industrial Classification (SIC) of your business through Companies House.

​If you think VAT is being applied incorrectly on your water bill, contact us so we can help.

Here’s a breakdown of typical water bill charges:

• Volume Charge – this is a charge based on the amount of water that has been used by the business. The charge per cubic meter is determined by two things; the location of your business premises and the charges applied by your water supplier.
• Fixed/ Standing Charge – you will be charged a standard fee by your supplier to cover the costs of reading and maintaining your commercial water meter.

The calculation for your water charge is as follows:

standing charge + (volume of water used x volume rate) = your water charge.

There’s often some confusion around this charge. There are a couple more elements to be considered in this calculation. We’ll break it down below.

• Volume Charge – as you have probably guessed, you will be charged for the amount of water you have returned to the sewerage system. This charge is estimated based on the amount of water that originally entered the premises.
• Fixed/ Standing Charge – there’s a charge associated with maintaining the pipes that connect your premises to the local sewerage system. The costs are usually calculated based on the size of the building.
• Return To Sewerage Charge – finally there’s an estimated charge of how much water has been removed as wastewater. The factor is assumed at 100% by most water suppliers (what goes in, must come out!).

The calculation for your wastewater charge is as follows:

standing charge + (volume of water used x volume rate x return to sewerage charge) = wastewater charge.

Depending on how your water bill is set up, you could receive separate bills for your water usage and your wastewater. However, in most cases, your commercial water bill will include the following:

• Basic business information – name, address, reference number
• Supply point ID/ waste supply ID – a unique number to help identify your building supply
• Account charges – you’ll get a summary of charges including outstanding payments and any adjustments made
• Charge breakdown – you should receive a full charge breakdown in detail. This is made up of fixed charges to cover maintenance, volume usage charges and any other charges.

No, there will be no interruption of your water supply or wastewater services during the switching process.

​By switching, you are only changing the retail supplier of your water (the company that deals with billing and customer services). The regional wholesaler that maintains the pipes and provides water services will continue to supply your premises during and after the switch.

Similar to the business energy market, once your contract ends, your business water supplier will place you on a deemed rate contract. These are often the most expensive commercial water rates the supplier offers.

You should make note of your contract end date, so you can start shopping around for new deal well in advance or contact us so that we can do this for you.

Ofwat is the regulatory body for the water sector. They monitor and control the privatised water and sewage industry in England and Wales.

The Water Services Regulation Authority is an independent regulator that was first founded in 1988. They operate in a similar way to other regulatory bodies you may have heard of, like Ofsted, Ofcom, and Ofgem. They are set up as a part of the government’s strategic priorities to create better value for business utilities.

Ofwat is a non-ministerial department. This means that it is a department in its own right but does not have a minister that governs it.

Specifically, they are an economic regulator. It is responsible for monitoring prices, setting limits, protecting consumers, and emphasising the importance of investment in the water industry.