Liability 鈥� water and sewage
Value Added Tax
Guidance
This guidance note looks at the liability of supplies of and connected with water and sewage.
For an overview of VAT liability more broadly, see the Liability - overview guidance note.
In-depth commentary on the legislation related to supplies of water and sewerage services is contained in De Voil Indirect Tax Service V4.271.
Water, sewage and connected services - the basics
Liability of supplies of water
When considering the liability of supplies of water it is helpful to make a distinction between:
- 鈥�
water supplied for industrial activities
- 鈥�
water supplied for non-industrial activities
Water for industrial activities
Water which is supplied for what the VAT legislation calls a 鈥榬elevant industrial activity鈥� will be standard-rated. The supplier is responsible for determining who is using the water and the correct VAT treatment of the supply made.
A relevant industrial activity is one of the activities described in Divisions 1 鈥� 5 of the 1980 edition of the Standard Industrial Classification. The five divisions are:
- 鈥�
energy and water supply industries
- 鈥�
extraction of minerals
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