Switch Business Water Suppliers and Start Saving on Your Water Rates

If you have never switched water before, your supplier will be the default provider in the area. You can find out here. 

If you have switched, you will be able to find out based on a recent business water bill. 

No. You’re only switching the retailer who manages your billing. The supply at your business address and the pipes will remain the same.

Switching your business water supplier is free. You may have to pay an early exit fee to your current supplier if your contract is not ending.

Some business water retail services may offer a discount for direct debit payments.

You may need to pay an early exit fee if you switch business water suppliers when in a contract. However, you can still compare business water rates to see if the savings outweigh the exit fees. 

Business water rates are less volatile than other utility markets so locking in your business water rates in advance of your contract end date is often a good idea.

Despite being connected to the same regional water network, the business water market operates differently to the household market. Business customers in Scotland and England can choose between a range of water retail suppliers to get a better deal while household customers are not yet able to access the competitive retail market.

There are no immediate plans to give household customers a choice of water retail provider in either Scotland or England.

Ofwat is the regulatory body for the water sector. They monitor and control the privatised water and sewage industry in England and Wales.

The Water Services Regulation Authority is an independent regulator that was first founded in 1988. They operate in a similar way to other regulatory bodies you may have heard of, like Ofsted, Ofcom, and Ofgem. They are set up as a part of the government's strategic priorities to create better value for business utilities.

Ofwat is a non-ministerial department. This means that it is a department in its own right but does not have a minister that governs it.

Specifically, they are an economic regulator. It is responsible for monitoring prices, setting limits, protecting consumers, and emphasising the importance of investment in the water industry.

A SPID number is a ten-digit code that helps locate your business water supply. This is used universally by all water suppliers to identify your business and its location. 

This number will always be the same even when you switch business water suppliers. This ensures you're paying for your water supply and nobody else's. You can find your SPID on your water bill. 

When thinking about the benefits of reducing the amount of water we use in our homes, we often only consider the impact that it will have on our water bills. However, using water efficiently can also help to lower your energy bills. Around 28% of the average property’s heating bill is spent on heating water — that equates to around £125 per year. Efficient water use can help to lower these costs.

Additionally, energy is used to treat, pump and heat the water that we use in our homes and this contributes to the UK’s carbon dioxide emissions. By being more efficient with your water use, you can help to tackle climate change.

There are plenty of quick and easy measures that can help you increase your household’s water efficiency. These include:

• Replacing baths with showers — By sticking to showers instead of baths, you could save up to £10 a year on your utility bills ^[2]. Additionally, by reducing the time you spend in the shower by just one minute, you could save up to £8 a year.
  
  
• Stop the drips – According to the Energy Saving Trust, a dripping tap can waste over 5,000 litres of water on a yearly basis. Prevent this by ensuring that all your taps are closed properly ^[4].
• Say no to running taps — A fair few of us have a habit of leaving the taps running whilst we shave, brush our teeth and wash our face. Kicking this habit and turning the tap off can help us save a significant amount of water.
• Fully load your washing machine and dishwasher – By filling these appliances up as much as possible, you are making the most out of the water that is used. You should also try to select the settings and cycles that are the most water-efficient.
  
  
• Use a bowl – Using a bowl to wash your dishes instead of running water will help to increase your water efficiency.
  
  
• Reduce your temperatures – Use cold water or a lower temperature when hot water isn’t needed. This can help to reduce energy usage from your heating system.

• Insulate your hot water cylinder – Lagging your water pipes will help to keep water warm for longer periods, which means less work and energy usage from your heating system. Visit our Heating efficiency guide to find out more about how you can reduce energy usage when heating your home.

There are also a number of products that you can buy to help you reduce your water usage. Such as:

• Water meters - Water meters help you keep track of your water usage and provide you with more accurate water bills; similar to the way that smart meters help to measure energy use. Contact your water company to find out if you are eligible to have a water meter installed.

• Efficient shower heads – Fitting a shower head that delivers water efficiently can save you up to £38 a year on energy used to heat water ^[3].

• Low flush & dual flush toilets – These flush functions will help to regulate the amount of water that your toilets use.

• Tap aerators – These tools can be fitted to the end of your taps or applied inside of the spout. They mix in air with the water flow to reduce the amount of water that is supplied without affecting the pressure.

We’ve established what charges are involved in your business water bill, and now here’s the breakdown of the charges.

Volume Charge - this is a charge based on the amount of water that has been used by the business. The charge per cubic meter is determined by two things; the location of your business premises and the charges applied by your water supplier.

Fixed/ Standing Charge - you will be charged a standard fee by your supplier to cover the costs of reading and maintaining your commercial water meter.

The calculation for your water charge is as follows: standing charge + (volume of water used x volume rate) = your water charge.

There’s often some confusion around this charge. There are a couple more elements to be considered in this calculation. We’ll break it down below.

Volume Charge - as you have probably guessed, you will be charged for the amount of water you have returned to the sewerage system. This charge is estimated based on the amount of water that originally entered the premises.

Fixed/ Standing Charge - there’s a charge associated with maintaining the pipes that connect your premises to the local sewerage system. The costs are usually calculated based on the size of the building.

Return To Sewerage Charge - finally there’s an estimated charge of how much water has been removed as wastewater. The factor is assumed at 100% by most water suppliers (what goes in, must come out!).

The calculation for your wastewater charge is as follows: standing charge + (volume of water used x volume rate x return to sewerage charge) = wastewater charge.

Depending on how your water bill is set up, you could receive separate bills for your water usage and your wastewater. However, in most cases, your commercial water bill will include the following:

• Basic business information - name, address, reference number
• Supply point ID/ waste supply ID - a unique number to help identify your building supply
• Account charges - you’ll get a summary of charges including outstanding payments and any adjustments made
• Charge breakdown - you should receive a full charge breakdown in detail. This is made up of fixed charges to cover maintenance, volume usage charges and any other charges.

Some businesses in the UK have to pay water VAT. You can find out whether or not you need to pay business water VAT from your Standard Industry Classification (SIC) code. If your business falls under one of the first five divisions set out by the UK Standard Industrial Classification of Economic Activities of 1980, you will have to pay for business water VAT.

• Division 1 - Energy and water supply industries
• Division 2 - Extraction of minerals and ores other than fuels; manufacture of metals, mineral products and chemicals
• Division 3 - Metal goods, engineering and vehicles industries
• Division 4 -Other manufacturing industries
• Division 5 - Construction

Most businesses that pay VAT on water bills are part of the following industries.

• Textiles
• Mining
• Manufacturing
• Engineering
• Utilities
• Chemicals
• Construction

Organisations that fall under the following divisions do not have to pay VAT on business water bills.

• Division 0 - Agriculture, forestry, and fishing
• Division 6 - Distribution, hotels, catering, and repairs
• Division 7 - Transport and communication
• Division 8 - Banking, finance, insurance, business services, and leasing
• Division 9 - Other services such as education and public services
• Division 000 - Diplomatic representation and international organisation

The government decides how much VAT to impose on business water bills. Any business that falls under the correct divisions will pay 20% VAT on their water usage. 

Similar to the business energy market, once your contract ends, your business water supplier will place you on a deemed rate contract. These are often the most expensive commercial water rates the supplier offers.

You should make note of your contract end date in a digital calendar so you can switch business water suppliers when you’re approaching the end of your contract.

You may be wondering how the price of your water is calculated from the beginning, and who controls the market. Even with deregulation, a regulator has been placed to ensure that businesses continue to get a fair deal on their water rates.

The market in the UK is controlled by three organisations:

Ofwat - the most recognisable name out of the three, they are the economic regulator and licencing authority.

Defra - stands for the Department for the Environment, Food, and Rural Affairs.

MOSL - is the market operator and ensures the market remains easy to understand and efficient.

For Scotland, the Water Industry Commission for Scotland (WICS) manages the market.

Businesses purchase water from retailers licensed by Ofwat and WICS. These retailers purchase water and wastewater services from wholesalers who are responsible for owning and operating the network pipes, mains, and treatment works. Your wholesaler is dependent on the region your business operates in.

You can switch business water retailers who are responsible for your billing, obtaining meter readings, and providing customer service. This is similar to the energy market.

Rateable value is a charge calculated on the value, size and location of the business premises. The rateable value is used by commercial water suppliers to estimate the consumption of an unmetered business.