Will I be charged VAT On My Water Bill?
ARTICLE * 2 MINUTE READ * MONDAY 27TH JUNE 2022
If you run a non-industrial business, you may be exempt from paying VAT on your water supply. If you run an industrial company, whether you will pay VAT on your commercial water bill depends on your main business activities as determined by your SIC code. VAT is charged at the standard rate of 20% with Everflow.
You will be charged VAT if your business is:
- An energy or water supplier
- An extractor of minerals or ores
- A manufacturer of metals or goods vehicles
- A manufacturer of any product that uses water within the process
- A construction industry
What is a SIC code?
VAT charges for water usage depend on your Standard Industrial Classification (SIC) code, which are given to limited companies by the Office of National Statistics to identify their principal business activities.
The codes identify the activities of each individual company, and businesses are then grouped into sections under specific classifications. Your company may have one to several SIC codes depending on how complex your business is – if the latter, your main SIC code will be used to determine your VAT charge.
How to avoid incorrect VAT charges
To make sure you’re paying the correct VAT charges on your business water bills, let us know your SIC code. If you don’t inform your retailer of your SIC code, regardless of the business, they will be required by law to charge VAT on your commercial water services by default.
If you would like more information and advice about VAT on commercial water supplies, contact us by emailing email@example.com or calling us on 0330 6600 137.