RCB/40/12 VAT—connection charges for water
Revenue & Customs Brief, Issue 40. 28 December 2012
This brief explains Her Majesty's Revenue and Customs' (HMRC) change of policy on the VAT liability of first time connection charges for water.
Water companies, building contractors and plumbers.
To be aware of HMRC's change of policy on water connection charges. This affects first time connection charges made by the same person who is supplying the water to the same customer.
Revenue & Customs Brief 43/11 announced that from 1 January 2012 one-off charges for the first time connection to gas and electricity made by the same person (or by members of the same VAT group) who supply the gas or electricity would follow the treatment of the utility and be reduced rated. Given the similarities, HMRC has now completed a review of first time connection charges for water.
Liability of first connection charges supplied with water
Where a customer contracts with a water supplier to provide mains water and that necessitates a first time connection to that water supply, the