Okay, don’t get too excited—this zero VAT rate applies to standard water and sewerage charges. But if you buy bottled water for your office fridge, that’s different. Bottled water is treated as a “soft drink” or retail product, so it gets the full 20% VAT slapped on it.
Water Usage Rates per Kilolitre (Excluding | StudyX
Also, if you sell water as part of a meal—like in a restaurant—that’s VAT-able too. But the water coming out of your tap at the factory? Zero.
So if you’re a bakery, the water you use to mix dough is tax-free. But the bottled Evian you put in the break room? Uncle Sam (or rather, HMRC) wants their 20%. Makes you think twice about fancy hydration, huh?
Is This the Same Everywhere?
Because you’re a curious reader, you’re probably wondering: Is this a UK thing, or are other countries just as generous? In the UK, it’s a solid rule. But in the US, water bills vary by state and include sales tax—sometimes up to 10% in certain spots. In Germany, water has a reduced VAT of 7% instead of the standard 19%.
So next time you travel and see a business water bill in Paris or Tokyo, just smile smugly at your UK zero-rate. It’s like finding a €20 note on the street—unexpected and delightful.
