Household customer to non-household customer
- What is Market Reform?
- The UK Government passed a new Water Act in 2014. It is a piece of legislation designed to address the current and future challenges faced by the water and sewerage sector.
One of the key reforms proposed is the introduction of retail competition for water and sewerage services to non-household customers in England, which will be in place from April 2017. This means that our circa 91,000 non-household customers (such as businesses, charities and public sector organisations) could opt to change retailer from April 2017. Household customers, the vast majority of our customer base, are not affected by these changes.
This is a regulatory change affecting all English water and wastewater companies that Southern Water must comply with.
- What does retail mean?
- 'Retail' refers to the way in which customers are billed for their water and sewerage as well as customer services including meter reading.
It is only this part of the water industry which is being opened as a competitive market in April 2017 and non household retail represents only a very small part of our business.
- What does wholesale mean?
- The ‘wholesale’ part of the water industry is not being opened for competition. This means that Southern Water will continue to operate the network of pipes, mains and treatment works.
This is similar to Network Rail maintaining rail track and infrastructure As a wholesaler, Southern Water will sell water and sewerage services to the companies who enter the retail market. In some instances, Wholesalers will still need to interact directly with customers. For example, customers will still contact Southern Water to report leaks.
- What does non-household mean?
- Non-household means that the main use of the premise is for non-domestic use. Non-household includes businesses, from factories to small shops and hairdressers, charities and public sector organisations.
- How has my classification been decided?
- We have used the market eligibility rules as defined by OFWAT to classify premises. Whether you are classified as a non-household customer or a household customer is driven at a premise level. As a customer you could have premise that are classified as non-household and/or household.
- How has it been decided that I should be classified as a non-household customer?
- A premise is classified as non-household if:
• the property is liable for business rates. This would be the case even if you are exempt from business rates or qualify for small business rates relief.
• the main use of the premise is for business (even if there is mixed household and non-household use are the premise)
• the property is not liable for council tax. Council tax is applied to households.
• if you pay VAT on your water rates.
- I no longer use the premise for business use – what should I do?
- If you have recently changed the use of your premise or the premise is only for household use, please contact us on 0330 303 0277 and we will discuss your individual circumstances with you.
- I have a query about my change in status – who do I speak to?
- If you have a query about the change or believe that your details are incorrect please contact 0330 303 0277.
- Will my bill be affected if I am now a non-household customer?
- The majority of customers will see an increase of no more than £20.00 over a year. There are small number of customers whose charges will go up by more than this depending on the annual consumption recorded on your meter.
- Where can I find more information about non-household charges?
- Information on non-household charges can be found www.southernwater.co.uk/business-our-charges
- What differences will I see being a non-household customer?
- If your premise has been reclassified as non-household, you will see the following changes:
If you have a meter
1. Your charges will be based on the non-household tariff from your next bill. This is likely to result in a) An increase in your standing charge b) A small increase in the unit rates for water and wastewater (just under 1p/m3 if you take both services)
2. If you receive waste water services from Southern Water, you will see a change to your ‘Return to Sewer’ percentage. The existing household return to sewer percentage is 92.5%. This will change to the non-household rate of 95%. This will mean you will see an increase in your wastewater volume charges.
If you do not have a meter:
1. You won’t see any change to your charges until April 2017. From April 2017 your charges will be based on non-household charges. Details of the current charges for non-household customers can be found www.southernwater.co.uk/business-our-charges
2. You will be eligible for the competitive water market in April 2017 which means you are able to ‘shop around’ for a retailer much like you are able to for your gas and electricity.
- Where can I find out more information about VAT?
- VAT is a HM Revenue & Customs requirement for non-household customers. The liability to pay VAT on water supply charges depends on your main business activity. The categories are defined by H.M. Revenue & Customs.
For a more detailed explanation and to complete our online VAT questionnaire www.southernwater.co.uk/vat-sic. You can also find out more about VAT regulations and HM Revenue & Customs requirements on the HMRC website or call the National HMRC Advice Service on 0845 010 900.
How can I find out more information?
If you have any questions or feedback, please contact:
Telephone – 0330 303 0277
Businesses and charging VAT – www.gov.uk/vat-businesses/how-vat-works
Website – www.open-water.org.uk
Our charges are reviewed each year. If you would like information about our charges see our household charges.
Direct Debit – an easier way to pay
Paying your water services bill by monthly Direct Debit is the quickest and easiest way to pay. And that’s not all. It’s simple, convenient and safe and allows you to:
- Choose a monthly payment date to suit you
- Spread the cost of your final Southern Water bill.
It also means that Southern Water will be able to automatically transfer your payment details to Business Stream on 3 April 2017 - which is one less thing for you to do.
Sign up online today.
HM Revenue & Customs require us to collect information from our customers that allows us to determine the VAT liability of our supply.