Commercial water use at residential address

SamDunham

Wondered if any Northumbrian Water rep could help me?

I'm self-employed and run a small cleaning company with my OH.
We use about 3000 litres of water a week. We take the water from our home address.
Our current water company asks us to estimate what % of our usage is domestic and what is for our business and bills us accordingly.

We're hoping to move shortly and will come under Northumbrian Water. I've had some conflicting adbice from them today on the phone. One adviser said that I cannot use any water at all from my home if it will be used for our business. I've been told that I must hire a stand pipe. This is just not feasible for us for various reasons.
Does anyone know if this is correct? Why can't they just do what our old company did?

TIA

Cardew

Contact the Consumer Council for Water and seek their advice.


http://www.ccwater.org.uk/

Jue*k

In my area if you operate a business from home you are asked to go on a water meter. That way you are paying for what you use. All businesses must be on a meter so they treat a business from home in the same way - actually sounds fair to me.

SamDunham

To update in case anyone else has a similar issue:
Northumbrian water have stated that as long as a meter is fitted and we pay for the amount we use (which we do) we can use the water for whatever we like, commercial, domestic, whatever.

Cardew

SamDunham wrote: »

To update in case anyone else has a similar issue:
Northumbrian water have stated that as long as a meter is fitted and we pay for the amount we use (which we do) we can use the water for whatever we like, commercial, domestic, whatever.

I think that is an over simplification.

The rules re VAT are clearly laid down here.

https://www.gov.uk/government/publications/vat-notice-70116-water-and-sewerage-services/vat-notice-70116-water-and-sewerage-services

It depends on which uses the most water - domestic or industrial.

Mixed use - the ‘predominant activity’ test

2.5.1 General rule

Where water supplied to a customer is used for both relevant industrial activities and other purposes, the liability of the supply depends on the predominant activity of the customer.

For example:
•where a customer has both relevant industrial activities and other business activities
•and the predominant activity is one or more relevant industrial activities

the whole supply is standard-rated.

Where a decision has to be made about what constitutes the predominant activity, any reasonable basis may be used. These could include, for example:
•turnover
•or the number of employees engaged in the respective activities.

Where you supply water to a customer who has both domestic (or other non-business) and relevant industrial use of water, the predominant activity of that person - for this purpose - is the use to which most of the water is put. The same approach would apply in the case of mixed domestic, relevant industrial and other business use.

You should establish the ‘predominant activity’ of each of your customers, and tax the water supplied accordingly.

There is no apportionment in cases of mixed relevant industrial and other use. In such cases a supply of water is either wholly standard-rated or wholly zero-rated.

2.5.2 Exception to general rule

There is one exception to this general approach.

Where:
•a relevant industrial customer has two or more business activities
•and one of those activities is non-industrial and exempt for UK VAT purposes
•and that exempt activity is not the predominant activity
•and the water supplied to the exempt business activity is separately identified and separately invoiced

the water so invoiced may be treated as separately supplied and zero-rated.

This avoids putting a customer with separate non-industrial, VAT-exempt, activities and industrial activities at a disadvantage, compared to a customer who has only non-industrial exempt activities.