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

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
Owner-Managed Businesses

Sales, advertising and marketing

Sales, advertising and marketingExpenditure on sales, advertising and marketing activities may include amounts which are disallowable for the purposes of calculating trading profits. This may be because the expenditure is:•capital in nature (see the Capital vs revenue expenditure guidance note)•not

14 Jul 2020 13:28 | Produced by Tolley Read more Read more

Classes of NIC and who pays them

Classes of NIC and who pays themClass 1 NICClass 1 NIC is payable on earnings paid to an employed worker which derive from, or are treated as deriving from, an employed earner’s employment in the UK. There are two kinds of Class 1 NIC, primary contributions for which the employee is liable and

Read more Read more