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Can My Home-Based Business Switch Water Supplier?
In the world of business, things are not always as completely straightforward as one might expect. Sometimes a home and business can occupy the same physical space, which can lead to difficulties in separating business expenses from personal use. Water and other utilities are not an exception to this rule. At the time this post was written, the water market has been deregulated in England for businesses, offering the freedom to switch water supplier, but the same is not true for individual households.
In the coming years, there are plans to roll out deregulation to include households, but in the meantime, there may seem to be a bit of a grey area regarding the separation of water for your home-based business from your home itself.
Types of Premises
The rules regarding whether a property is eligible to be classed as a business and is therefore able to switch water supplier are based primarily on the concept of principal use. There are three categories that a premises can fall under.
Domestic
Household premises are not currently eligible to switch water suppliers, as the current deregulation legislation only applies to businesses that meet certain criteria. A premises is classed as a domestic property if they are only liable for Council Tax, and not business rates.
Non-Domestic
A non-domestic property is one that is liable for business rates only. This is a cut-and-dried case where 100% of the activity conducted on the property is for business purposes, and there are no living quarters or other aspects that would indicate part of it is a home. This type of premises is eligible as a business to switch water suppliers.
Mixed-Use
Mixed-use premises are the category that a home-based business would fall under, and is where the distinctions between a home and business begin to get tricky. Mixed-use properties are assessed on a case by case basis.
In the case of a home-based business which consists of a single office within an ordinary residential house, the company would not be eligible to switch water suppliers. This is because the primary use of the property is a home, with only a small secondary portion operating as a business.
Although this rules out a significant number of smaller home-based businesses, there are still situations where you could be able to switch suppliers.
One common example is a farm. In this case, the boundaries between the home and business portions of the property are clearly defined and the water usage can be easily separated.
A shop that rents a flat above it can be another situation where the property would be classed as mixed-use, but should be easily able to prove the distinction between the two areas of the premises. Ideally two water meters would be installed, one for the business and one for the residence.
Recommended Next Steps
Since mixed-use properties are assessed on a case by case basis, you should begin gathering evidence to support your claim if you intend to switch business water suppliers but have a premises that falls under this category.
Mixed use properties are normally classed as non-domestic unless there are grounds to consider that its principal use is as a home. Nonetheless, it’s better to be prepared with photographs, floor plans and other evidence in case of a dispute.
If you are planning to switch water supplier for your mixed-use property, you don’t have to do it alone. The experts at H2O Building Services can assist to ensure the transition is as smooth as possible get in contact on 01924 387 873 or through our website contact us.