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HMRC internal manual

VAT Water and Sewerage Services

HM Revenue & Customs
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Supplies of water: basic position

The basic position under the law (VATA 1994 Schedule 8 Group 2 Item 2) is that supplies of water are zero-rated (see VWASS1000) unless:

  • they are used in connection with the carrying on of a “relevant industrial activity” (see VWASS2200), or
  • they fall under one of the excepted items to zero-rating listed in the law. These are:
  1. distilled water, deionised water and water of similar purity (see VWASS2500),
  2. bottled water for human consumption - (see VWASS2500), and
  3. water which has been heated so that it is supplied at a temperature higher than that at which it was before it was heated - (see VWASS4000).