Liability ― water and sewage

Copyright © 2026 LexisNexis
Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance

Liability ― water and sewage

Copyright © 2026 LexisNexis
Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance
imgtext

This guidance note looks at the liability of supplies 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:

  1. •

    water supplied for industrial activities

  2. •

    water supplied for non-industrial activities

Water for industrial activities

Water which is supplied for what the VAT legislation calls a ‘relevant industrial activity’ 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 1–5 of the 1980 edition of the Standard Industrial Classification. The five divisions are:

  1. •

    energy and water supply industries

  2. •

    extraction of minerals and ores other

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
TAKE A FREE TRIAL NOW
Powered by Tolley+™
  • 29 Jul 2025 10:00

Home/ Tolley Tax Guidance/ Value Added Tax / Determining VAT liability

Popular Articles

Trusts and Inheritance Tax

Settlor-interested trusts

Settlor-interested trustsWhat is a settlor-interested trust?A settlor-interested trust is one where the person who created the trust, the settlor, has kept for himself some or all of the benefits attaching to the property which he has given away. A straightforward example is where a settlor

14 Jul 2020 13:38 | Produced by Tolley Read more Read more
Employment Tax

Ministers of religion

Ministers of religionMost ministers of religion or members of the clergy are either office-holders or employees and so their earnings are taxable under ITEPA 2003 as employment income and are subject to Class 1 National Insurance.For the purposes of the tax system, a minister does not have to belong

14 Jul 2020 12:14 | Produced by Tolley Read more Read more
Value Added Tax

Exemption ― overview ― items exempt from VAT in the UK

Exemption ― overview ― items exempt from VAT in the UKVAT exemption: list of supplies exempt from UK VATThe goods or services that are exempt from VAT are listed under various group headings within VATA 1994, Sch 9, Pt II.It is important to remember that not all supplies that come within a heading

14 Jul 2020 12:45 | Produced by Tolley Read more Read more