Business Water Rates
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We clarify how business water rates work and help business owners understand their water bills. Business water rates are both confusing and tedious. Most people don’t bother to look through their water bill to know how it works.
Business water rates change depending on where you are located. For example, if your business is in Cornwall, your commercial water rates will differ from a company in London.
Here’s the key part of our guide:
Let’s start with a summary of the regional default water rates that most businesses pay.
Using published data from each regional default water supplier, here are the 2023/24 business water rates.
These water rates apply for water used by commercial properties from 1 April 2023 to 31 March 2024.
|Wholesale region||Default supplier||Water £/cubic meter||Wastewater £/cubic meter|
|United Utilities||Water Plus||1.9082||1.3507|
|Yorkshire Water||Business Stream||1.5916||1.9728|
|Severn Trent||Water Plus||1.8492||1.2965|
|Thames Water||Castle Water||1.8683||1.1092|
|Southern Water||Business Stream||1.6105||2.2758|
|Wessex Water||Water 2 Business||2.4078||1.8485|
|South West Water||Source for Business||2.0059||3.3916|
Over 80% of all English pay the needlessly expensive default water rates presented in the table above.
Find a cheaper fixed-rate contract with AquaSwitch. Compare commercial water rates currently offered in the market with our business water comparison service.
Scotland has only one company responsible for managing the water and sewerage network – Scottish Water.
Business Stream is Scotland’s default business water supplier, and here’s a summary of deemed water rates that apply from 1 April 2023 to commercial properties with a typical meter size of 12/15mm.
|Water rates type||Default||Scottish water wholesale|
|Water annual standing charge||£160.27||£78|
|Water - First 20 cubic meters||£2.4046 / Cubic meter||Nil cost|
|Water - Next 100 cubic meters||£0.9019 / Cubic meter||£1.426 / Cubic meter|
|Water - All additional volumes||£0.9019 / Cubic meter||£0.8228 / Cubic meter|
|Wastewater annual standing charge||£154.78||£55|
|Wastewater - First 20 cubic meters||£2.6895 / Cubic meter||Nil cost|
|Wastewater - All additional volumes||£1.6172 / Cubic meter||£0.9425 / Cubic meter|
|Surface drainage||4.125 p / £ RV||3.3705 p / £ RV|
In Scotland, default business water rates are significantly more expensive than the fixed rate offered on the market.
Scottish business water quotes are usually presented as:
Mixed-use properties that pay business rates and council tax continued to be charged like a home. Smaller businesses often continue to pay household rates determined directly by Ofwat.
A business that doesn’t have a water meter will be charged using an unmeasured tariff at a pre-determined amount, usually based on the value of the premises. This is known as the ‘rateable value’.
Here are the answers to frequently asked questions on business water rates.
Once a year. Business water rates change every year on the 1st of April. To view the latest business water rates in your area, you can review our tables above for English business water rates and Scottish business water rates.
Business water rates vary from region to region. The disparity arises because the cost of maintaining the regional water network is higher in certain parts of the country than in others.
As an example, there is less rain in the South West of England, and the region is sparsely populated. Hence, pipes need to travel long distances between reservoirs and properties, making water supply more expensive.
Each regional water network determines its own wholesaler charges. In Scotland, there is only a single wholesaler, Scottish Water. In England, the different regional water networks are:
Water and wastewater regional wholesalers:
Water only wholesalers:
The following rates relate to the 23/24 standard default non-household tariff in each region:
|Wholesale region||Default supplier||Standing water|
|Volumetric water |
|Volumetric wastewater |
|Scottish water||Business Stream||160.27||0.9019||154.78||1.6172|
|Severn Trent Water||Water Plus||92.26||1.8492||80.22||1.2965|
|South West Water||Source for Business||78.94||2.0059||93.28||3.3916|
|Southern Water||Business Stream||85.90||1.6105||88.86||2.2758|
|Thames Water||Castle Water||62.02||1.8683||106.39||1.1092|
|United Utilities Water||Water Plus||78.72||1.9082||193.31||1.3507|
|Wessex Water||Water 2 Business||66.75||2.4078||52.58||1.8485|
|Yorkshire Water||Business Stream||61.38||1.5916||109.25||1.9728|
Some wholesalers use different pricing structures depending on your property’s location within each region. The table above displays a representative tariff for each wholesaler based on a single region.
Further, the table has excluded surface and highway drainage charges that depend on individual properties’ surface area.
We recommend using the AquaSwitch business water comparison service for tailored quotes for business water rates. For further information about water rates in your region, refer to the wholesaler scheme of charges published on the website of your business water supplier.
The water rates paid by businesses in Britain depend both on region and the amount of water consumed. 1.2 million English and 0.3 million Scottish properties are registered on the non-household water network. The average business water charge for these properties is £2,000 per annum.
Most businesses do not pay VAT on water bills. The exception is industries that use large quantities of water as a direct input in their production, the biggest ones being:
Your business water supplier will automatically assess whether they need to charge your business VAT.
For our in-depth explainer, check out our guide to VAT on business water bills.
Generally speaking, domestic water rates are cheaper than business water rates because the average household uses less water than the average business. Domestic property water rates are calculated differently from business water rates.
Most homes do not have a water meter installed, so domestic water consumption is assessed rather than measured. Unless you specifically request a water meter for your house, a water supplier will charge your home a fixed cost regardless of how much water you use.
In contrast, most business properties pay water rates based on measurements taken by a water meter.
AquaSwitch completed a one-off study comparing a house and a small business property using the same amount of water. We found that, in this case, a business on the regional out-of-contract tariff will pay an average of 8.7% more than the household.
Yes. The water market for non-households is deregulated so businesses can switch suppliers to cheaper rates. Business water suppliers add a retail fee to the underlying wholesale water rates for customer services.
Ofwat carefully regulates water rates to avoid the excessive profitability of any of the companies involved in the supply of water and wastewater services.
Firstly the regional wholesale water rates are carefully controlled such a balance is maintained between:
Ofwat then further regulates the business water suppliers by providing an annual price cap which sets a maximum retail fee that can be charged to business customers.
The price cap increases annually and will increase significantly in April 2023 to encourage competition in the deregulated water market.
For more information, check out our guide to everything you need to know about Ofwat.
Business water rates charged by water suppliers are charged on a volumetric basis. The more water your business property uses the higher your water rates will be.
A typical small office with a handful of employees will consume in the order of 200 cubic meters of water each year and will be charged between £700 and £1,200 annually, depending on where the property is located and exact circumstances.
Yes, the amount a business pays for water rates depends on where your property is located. England is divided into approximately 20 different wholesale regions, each of which has its own company owning and operating the water infrastructure.
The cost of maintaining the water network in each region is different so business rates also vary from region to region. See our handy guide here to the different regional water rates.
Yes, most business water suppliers will offer a lower retail fee if your business opts for a longer fixed contract. Locking in a longer contract with a business water supplier has the additional benefit of avoiding annual increases in the retail default fees.
The key thing to remember with business water supplier contracts is that you will not be liable for the remainder of the agreement if you move out of a property.
In 2023, the mean average non-household water rates bill is £2,250 per annum. These average business water rates have increased significantly following price changes in April 2023.
The average figure encompasses millions of small businesses that use only a few cubic meters of water each and the largest industrial users, which spend millions yearly on water.
In most regions of England and Scotland, wholesale water companies offer large user tariffs for industrial customers. Large user tariffs generally levy a standing water charge in the tens of thousands but offer a lower volumetric water and wastewater rate than the standard tariffs.
The effect of large user tariffs is to provide a bulk-buy discount to those industries that use significant amounts of water in their production.
Business water rates are calculated on a volumetric basis; the more water a property uses, the higher the charges. Volumetric business water rates are measured in price per cubic meter. The following shows how much water properties are typically consumed:
However, some industries use a huge amount of water. Check out our blog post on which industries use the most water.
The cost of water for small businesses depends on where your business is located and your current supplier.
The cost of each cubic meter of water can cost anywhere from £0.90p to over £2.
To find out how much water will cost your company, here’s our complete guide to water rates for small businesses.
Yes, business water rates increased by an average of 14% in April 2023 due to inflationary pressures on the British water industry.
Check out our full guide to the 2023 business water price increase to find out how much water rates went up in your region.
Business water rates are zero-rated (0%) for most businesses. The exception to the rule is industrial users of water (food production, pharmaceuticals etc.) who pay VAT at the standard rate of 20%.
For more information, check out our complete guide VAT on business water rates.
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