Utilities and waste collection

Disclaimer:  While every effort has been made to ensure the accuracy of the information contained in the Pink Book, we regret that we cannot be responsible for any errors. The Pink Book contains general information about laws applicable to your business. The information is not advice, and should not be treated as such.  Read our full disclaimer.

Key facts

  • If the water supplies for your business come from a private supply, the Private Water Supplies (England) Regulations 2016 apply to you.
  • Local authorities must take and analyse samples of private water supplies from groundwater sources.
  • If you make a specific charge to your customers for gas or electricity, the most you can charge is limited by the 'maximum resale price' rule.
  • The maximum resale price is the same price that you have paid to your own supplier.
  • If you pay business rates, you must pay for a commercial waste collection service, unless you are exempt under the Controlled Waste (England and Wales) Regulations 2012.

Private water supplies

Private water supplies include water:

  • From groundwater sources.
  • Drawn from privately owned boreholes or wells.
  • Taken from surface water, such as springs and streams.

The Private Water Supplies Regulations (England) 2016 consolidated and repealed the Private Water Supplies Regulations (England) 2009. Together with the Water Industry Act 1991, they apply to all private water supplies that are intended for human consumption, whether this is for drinking, washing or food production. The aim of the regulations is to ensure that all private water sources are safe and free from contaminants.

Do these regulations affect me?

Yes: if any part of the water supply for your business comes from a private supply.

Private water supply tests

The 2016 regulations are very similar to the previous regulations, in that they require local authorities to record the number of private supplies in its area, and for each supply they must record:

  • The name of the supply, together with a unique identifier.
  • The type of source.
  • The geographical location, using a grid reference.
  • An estimate of the number of people supplied.
  • An estimate of the average daily volume of water supplied in cubic metres.
  • The type of premises supplied.
  • Detail of any treatment process, together with its location.
  • The name of the Health Protection Agency in whose area the supply is located.

After the initial assessment, the regulations require local authorities to monitor the supply on an ongoing basis. The regularity of the sampling will vary depending upon the volume of water used: from once a year for supplies of less than 10 cubic metres per day, to 34 times a year for supplies of up to 10,000 cubic metres per day.

In addition, the local authority must also undertake a thorough risk assessment of each supply at least once every five years.

In addition to the previous requirements, the Private Water Supplies Regulations (England) 2016 require local authorities to test private water supplies for radioactive substances (this usually means the level of naturally occurring radon in the water) – and undertake a risk assessment of new supplies, and supplies that have been out of use for more than 12 months, as soon as is reasonably practicable. The risk assessments of these suppliers will then be subject to a review every five years, as per the 2009 regulations.

Cost of samples

The local authority will contact the person responsible for the supply (this may be the landowner, a person using the water, or a person representing a group of water users) about sampling. The regulations allow local authorities to charge for testing required under the Private Water Supplies (England) Regulations 2016. However, they are only allowed to recover the actual cost incurred in carrying out required testing.

The bill will be sent to the person responsible. If an authority decides to carry out tests over and above those required by the regulations, it has to bear the costs of these tests itself.

If test results show that the water is unwholesome, because it fails to meet the standards or other requirements, the local authority can insist that the water supply is improved. If any private supply of water intended for human consumption constitutes a potential danger to human health, a local authority acting under these regulations will serve a notice to the responsible person. It is an offence to breach this notice. However, the regulations establish an appeal process if you wish to challenge a notice.

The resale of gas and electricity

Maximum resale prices

If you are reselling gas and/or electricity that has already been bought from an authorised supplier, the amount you can charge your customers is limited by the 'maximum resale price rule'. This means that the most you can charge a customer for the supply of gas or electricity is the amount that you yourself have been charged by your gas or electricity supply company. Put another way, you can only sell gas or electricity to your guests on a non-profit basis.

As the provisions relating to the maximum resale prices for electricity and gas are reviewed from time to time, you should also occasionally check the Ofgem website (see Further guidance, below) to see whether there have been any changes.

Do maximum resale prices apply to me?

  • Yes: if you make a specific charge to your customers for gas or electricity, whether or not you use individual meters to record their consumption. The rule typically applies to self-catering accommodation and caravan sites, although it affects all businesses where separate charging occurs. If you overcharge for electricity or gas, your customer can ask for a refund of the excess and can pursue the matter in the Small Claims Courts if necessary.
  • No: if you do not make a specific charge for electricity and/or gas (for example if customers are charged a single rental figure for fully inclusive accommodation). The rule also does not apply to any gas or electricity that is used in communal facilities, such as for the use of a tumble dryer in a laundry room, or a shower in a washroom block at a caravan park. In other words, there is no maximum limit on what you can charge a guest for using a communal washing machine, provided that this use is billed separately from the charge for general gas and electricity use.

Price of energy units

If you are charged a single unit rate for gas or electricity by your own supplier, you must charge your customers the same rate. If the unit rate varies, for example if you pay on an Economy 7 type tariff or if prices vary on a seasonal basis, you will need to calculate an average price for each unit used.

If you have a meter (either a normal meter or a smart meter) for a property, then you should take readings at the beginning and end of the customer’s stay and calculate the cost of use using the price that you are paying your supplier. If you are not using a meter, then you must use your reasonable steps to estimate how much energy the customer has used and be able to justify your calculation if challenged.

Note: the requirement to only charge customers the actual cost of electricity does not extend to the recharging of electric vehicles. This means that if you have a dedicated EV recharging point you can charge customers an additional fee on top of the actual cost of the electricity.

A copy of the explanatory publication, The resale of gas and electricity – guidance for resellers is available to download from the Ofgem website. This gives further information and includes example resale price calculations.

Standing charges

In addition to the charge for units used, many authorised suppliers levy a standing charge to cover the cost of maintaining your connection and billing you for the fuel. You can recover this from your customers: the individual sums need to be calculated according to the number of units of electricity that are used by each consumer. As above, the Ofgem publication gives further guidance.

Waste collection

If you pay business rates, you must also pay for a commercial waste collection service through your council or with a private contractor – unless you qualify for an exemption under the Controlled Waste (England and Wales) Regulations 2012. The regulations provide an exemption from waste disposal charges for small businesses that:

  • Were operating prior to 6 April 2012 and were eligible for free waste disposal at this date, and;
  • Are eligible for Small Business Rate Relief (that is, the property has a rateable value of less than £15,000).

Note: waste collection charges comprise two components: a charge to collect the waste, and a charge to dispose of it. Therefore, even if you qualify for the exemption from waste disposal charges, you must still pay for your waste to be collected.