Will I be charged VAT on my water bill?

Value-added tax is levied by the water retailers when supplying 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 then contact your water supplier.