What's on this page
Share this article
Since the English water market was deregulated in 2017, businesses have had the freedom to switch suppliers to find better rates. However, deregulation also brought administrative complexities, meaning thousands of UK businesses are currently overpaying due to inaccurate billing, hidden leaks, and incorrect tariffs.
Non-household buildings account for around 20% of all public water demand in England, and the government has set a target to reduce this non-household water demand by 15% by 2050.
Business water bills have noticeably been creeping up, and a commercial water audit is an effective way to identify any billing issues and recover lost cash or overpaid VAT. Here is how to audit your water usage and check if your business is being overcharged.
What is a Commercial Water Audit?
A commercial water audit is a comprehensive review of your business’s water usage and historical billing. The goal is to ensure you are only paying for the water you actually use and that your business is on the most cost-effective tariff available.
Audits typically look at three core areas:
-
Desktop Billing Analysis: Checking historical invoices for incorrect meter readings, overlapping charges, or incorrect allowances.
-
Site Tariffs: Ensuring your charges align with your actual property type and size.
-
Physical Water Usage: Identifying on-site inefficiencies, such as underground leaks or outdated infrastructure.
While large businesses' sites often hire external specialists for this, SMEs can perform a basic water efficiency audit in-house to catch the most common billing errors.
call our water experts 01613 022466
Common Business Water Billing Errors
If you think your water bill looks wrong, you aren't alone; billing issues currently account for 63% of all complaints made to water providers, proving that overcharging is a widespread issue, according to a recent Consumer Council for Water report.
It’s helpful to know what you’re looking for when auditing your water usage. If you suspect you have been overcharged, start by gathering the last 12 months of your water bills. Some retailers may have these available to download via an online account; others may send you paper bills.
Estimated Readings
This can be one of the main indicators that you may be paying the incorrect amount. If your bills show an ‘E’ next to any meter reading, your retailer is estimating your usage based on historical data rather than your actual consumption.
If your business has made an effort to reduce consumption, cut operating hours, or downsize, then you could be overpaying.
Incorrect Surface Water Drainage Charges
Surface water drainage is the fee you pay for rainwater that falls on your property and drains into the public sewer. However, instead of measuring your actual physical footprint, many suppliers still calculate this charge based on your property's Rateable Value (RV), its estimated open-market rental value.
This creates the "High Rent, Small Roof" problem. If your business operates in a highly desirable city-centre location, your RV will be very high. You could end up paying significantly more for surface water drainage than a massive industrial warehouse in a low-rent rural area, despite the warehouse generating far more rainwater runoff. Transitioning from an RV-based tariff to a Site Area tariff (based on actual square meterage) is one of the fastest ways an audit can reduce your bill.
Meter Sizing and Standing Charges
Typical standing charges depend on the size of your water meter. In some cases, a business will move into premises where a previous tenant required higher water usage. If you’re a small retail shop or office space but paying for a large meter, you’re likely wasting money every month.
Return to Sewer Allowances
Businesses are charged for wastewater based on the assumption that most of the water they draw in goes back down the drain. However, if your business uses water in its products (e.g., a brewery, bakery, or manufacturing plant) or for irrigation, you shouldn't be paying wastewater charges on the water that doesn't return to the sewer. You can claim a "Return to Sewer Allowance" to correct this.
How to Conduct a DIY Water Efficiency Audit
A physical water efficiency audit helps identify where water is being wasted on your premises. Even minor leaks can add hundreds of pounds to your annual cost.
-
The overnight meter test: To check for hidden leaks, locate your water meter and take a reading at the end of the working day when all equipment is turned off. Check the meter again first thing in the morning before operations resume. If the dial has moved, you leak.
-
Appliance checks: Inspect all visible pipework, boiler systems, and toilet cisterns. A constantly running commercial toilet can waste up to 400 litres of water a day.
-
Flow rate tests: Measure the output of your taps and showerheads. Installing low-flow aerators can reduce water consumption in staff washrooms by up to 50% without impacting pressure.
What to Do If You Are Being Overcharged
If your commercial water audit reveals errors, your first step is to contact your current retailer with the evidence. You can claim refunds for historic overcharges, though the claim period is generally capped at five or six years depending on your contract.
If your bills are accurate but your rates are simply too high, you are no longer obligated to stay with your regional provider.
Once you know exactly how much water your business consumes, you are in the perfect position to negotiate a better deal.
-
What is Rateable Value (RV) and how does it affect water bills?
Rateable Value (RV) is an official estimate of a commercial property’s annual rental value, set by the Valuation Office Agency (VOA). Before meters were standard, water suppliers used RV to calculate flat-rate charges. Today, many suppliers still use your property's RV to calculate Surface Water Drainage fees. Because RV is based on location and rental value rather than your physical footprint, businesses in high-rent areas often overpay for drainage.
-
How far back can a business claim for water overcharges?
In most cases, if a commercial water audit reveals that your business has been overcharged due to a retailer error, you can claim a refund for up to six years under the standard Statute of Limitations. However, this depends on the specific terms of your contract and the nature of the billing error. It is vital to gather historic bills to support your claim.
-
What is the difference between a water audit and a water efficiency audit?
A commercial water audit primarily focuses on the administrative and financial side of your water usage, analysing historic invoices, tariffs, and meter sizing to find billing errors. A water efficiency audit is a physical inspection of your premises to identify physical waste, such as underground leaks, dripping taps, or inefficient appliances.
-
Are SMEs eligible for a return to sewer allowance?
Yes. Any business, regardless of size, can apply for a return to sewer allowance if a significant portion of the water they consume does not return to the public sewer system. While common for large manufacturing plants or breweries, small businesses like bakeries, commercial landscapers, or those utilising private soakaways can also claim this allowance.
-
Can I switch business water suppliers if I am disputing a bill?
Yes, you can initiate a switch to a new water supplier while disputing historic overcharges with your current provider. However, you must continue to pay your current undisputed charges during the transition. If your current supplier owes you a refund, that dispute will remain active even after your new contract begins.
-
How much does a commercial water audit cost?
If you conduct a DIY desktop audit or a basic site inspection using your own team, it costs nothing but time. If your water infrastructure is complex and requires an external specialist, many auditors operate on a "no-win, no-fee" basis, taking a percentage of the savings or the historic refund they secure for your business.
