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 than fuels;

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

Personal Tax

Payment of tax due under self assessment

Payment of tax due under self assessmentNormal due dateIndividuals are usually required to pay any outstanding income tax, Class 2 and Class 4 national insurance, and capital gains tax due for the tax year by 31 January following the end of the tax year (ie 31 January 2025 for the 2023/24 tax year).

14 Jul 2020 12:52 | Produced by Tolley Read more Read more
Personal Tax

Taxation of dividend income

Taxation of dividend incomeIntroductionA dividend is a distribution of profit by a company to its shareholders.A dividend is not only a payment in cash. It can be the issue of new shares in exchange for forfeiting the right to a cash payment (a stock dividend). For more detail, see the Cash

14 Jul 2020 13:48 | Produced by Tolley Read more Read more
tag-icon Autumn Budget 2025 tag-icon Tax Returns
Corporation Tax

Double tax relief

Double tax reliefWhen income arises in a foreign country to a UK resident company and that income is taxable in that foreign country, the UK may give the company relief for the foreign tax by crediting the foreign tax against the UK tax charged on that income. This might include withholding tax on

14 Jul 2020 11:31 | Produced by Tolley Read more Read more