The codes reflect the activities of each company, and businesses are grouped into trades or sections with similar classifications. Most companies only need one SIC code, but some may need many, depending on the complexity of their business. In these cases, the main SIC code will be used to assess if VAT is charged.
In essence, if you run a non-industrial business, you could be exempt from paying VAT on your water supply. If you run an industrial company, whether you will pay VAT on your commercial water bill depends on your main business activities as determined by your SIC code. VAT is charged at the standard rate of 20%.
There are several industrial divisions where VAT is payable on business water bills. These are:
Non-VAT paying divisions
The other SIC divisions are exempt from paying VAT. These are:
How to avoid incorrect VAT charges
To ensure you’re paying the correct VAT charges on your business water bills, let your business water retailer know your SIC code. If you do not inform your retailer of your SIC code, whatever your business, they will be required by law to charge VAT on your commercial water services by default.
VAT charges for wastewater services
Our wastewater services are zero-rated for VAT. However, we may be required to apply VAT for new water and wastewater connections depending on the type of building being supplied.
If you would like more information and advice about VAT on commercial water supplies, please feel free to contact us using our 5-star webchat service.
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