Excellent 5* RatingHow a deemed tariff is applied to your account
A deemed tariff is what kicks in when nobody has signed a contract on the account. It is the legal default, and there are three common ways businesses end up on one.
The most common is moving premises. When you take over a site that already has a water connection, the supply does not switch off the day the last occupier leaves. The wholesaler keeps water flowing, the retailer who served the previous customer keeps billing, and you start receiving deemed-rate bills from day one.
The second is an expired contract. When a fixed-term agreement runs out and nothing is signed to replace it, the account rolls onto whatever deemed rate the retailer publishes that quarter.
The third is never signing a contract at all. Plenty of businesses, especially smaller ones, have always been on deemed rates because nobody ever quoted them or offered an alternative. In England, deemed was the only option until April 2017. Scotland had retail competition by 2008.
Why deemed rates cost more than contracted rates
Retailers price deemed tariffs higher because there is more risk attached. There is no contract length, no committed volume, and no notice period. The customer can switch any day they like, and the retailer cannot forecast revenue from the account. The deemed schedule sits above what the same retailer would offer on a one-year or three-year contract to cover that uncertainty.
In England, the gap is usually 10 to 20 percent. In Scotland the gap is wider and can reach 60 percent above contracted rates. Some of that is structural. The Scottish market is older, smaller, and shaped differently from the English one. Some of it reflects the smaller account sizes that make up most of the Scottish base, where competition for individual sites is thinner.
These figures move with each retailer’s published schedule and the wholesale charges underneath them, so the only number that really tells you what you are paying is the one on your own bill.
How to check if you are on a deemed tariff right now
Look at your most recent bill. If it does not reference a contract end date, a renewal date, or a fixed-term agreement anywhere on the page, the account is almost certainly on a deemed tariff. The line items will usually show standing charges, water and wastewater unit rates, drainage charges, and a retail fee, with no contract reference attached.
You can also call your retailer and ask outright. They have to tell you whether the account is on a contract or a deemed rate, and what the difference would be for your usage.
If you have never signed anything with the retailer who is billing you, the account is on a deemed tariff regardless of how long that has been the case. Years on deemed is common.
How to move off a deemed tariff
Switching off a deemed tariff is straightforward because there is no contract to exit. You can switch the same day, with no notice period, no exit fee, and no break in your supply.
The process takes around three weeks in England from the day you accept a new contract. The wholesaler stays the same, only the retailer changes, so the physical water supply is untouched. Switching is also available in Scotland on a similar timeline.
To switch you will need a recent bill, the address of the site, and your supply point ID number, which is usually printed on the bill as a SPID. A broker can quote you against several retailers in a single conversation, and the savings against the deemed rate are usually meaningful enough to make the time worthwhile.
