On 1 April 1990 the Community Charge (poll tax) was introduced. This was then replaced by the Council Tax system currently used. Initially, water companies were allowed to use rateable values as a basis of charging until 31 March 2000. The Water Industry Act 1999 however, removed this deadline and gave companies the right to continue using rateable values to calculate a bill for each property without a water meter.

What is the rateable value based on?
The rateable value is the likely annual rental value of the property at the time of assessment. A number of factors were taken into account by the Local Authority including the size of the property, general condition, and availability of local services.

How does rateable value affect my bill?
A set charge for the financial year is calculated by multiplying the rateable value figure by the relevant tariff for water and/or sewerage charges. The higher the rateable value, the higher the bill and vice versa. The bill does not reflect the number of occupiers in the property, or the amount of water used. Reductions are not given for single occupancy. Charges are payable in advance, unless an alternative payment frequency (monthly etc) is arranged with the company.

How can I make sure that my bill is based on the correct rateable value?
In 1973 local authorities compiled a list of rateable values for all properties in their area. Amendments and new additions to the list up to 31 March 1990 were sent to the water authorities to update their records. You can ask your water company to check its record of your rateable value.

Can I appeal if I think my rateable value is too high?
No. Rateable value assessments have not been made since 31 March 1990. Since that date there has been no appeal mechanism for existing rateable values.

Can I change the way my charges are calculated?
Customers can apply to have a water meter fitted and pay charges based on usage. Meters for domestic customers are now usually fitted free, and customers can go back to rateable value charges if they wish within a year of the meter being installed. A water meter typically benefits a customer living in a property with a high rateable value, but using little water. Your water company can provide you with information to help you estimate what your metered charges would be in comparison to your rateable value bill.

Why don't companies use the Council Tax to calculate bills?
Legislation currently prevents the use of the Council Tax register for any purpose other than local government taxation. Water companies are therefore not able to base charges on the Council Tax.

The Council Tax banding of my property has changed. Will this affect my rateable value?
No. The Council Tax is based on the market value of your property, whereas the rateable value is based on the annual rental value when it was assessed prior to 31 March 1990. As these are two different systems of taxation, a change in Council Tax banding will not affect the rateable value.

What happens if my property has been structurally altered since its rateable value was assessed?
You should contact your water company. If your property has changed in size or in use from domestic to commercial purposes or vice versa - it may mean that the rateable value is no longer valid. In some circumstances the company might insist that a meter is fitted or apply a new fixed charge

For further information
Contact our library.
Telephone: 0121 625 1361
E-mail address: enquiries@ofwat.gsi.gov.uk