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"the Authority" means, until the coming fully into force of section 36(1) of the Water Act 2003[2] (transfer to the Water Services Regulation Authority and the Consumer Council for Water of functions, property etc) the Director, and thereafter, the Water Services Regulation Authority;

"business year" means a period of more than six months in respect of which-

(a) a relevant undertaker prepares a single set of regulatory accounts; or

(b) a licensed water supplier publishes a single set of accounts or, if no such accounts have been published for the period, prepares a single set of accounts;

"company" means a relevant undertaker or a licensed water supplier;

"date of the notice" means the date on which the enforcement authority gives notice under section 22A(4) of the Act;

"preceding business year" means the last business year preceding the date of the notice;

"regulated activities" means-

(a) in the case of a company holding an appointment as a water undertaker, its functions as a water undertaker;

(b) in the case of a company holding an appointment as a sewerage undertaker, its functions as a sewerage undertaker; or

(c) in the case of a licensed water supplier, the activities authorised by its water supply licence;

"regulatory accounts" means regular accounting and other information which the undertaker is required by its instrument of appointment to supply to the Authority to enable the Authority to compare the financial position and performance of relevant undertakers; and

"water supply licence" shall be construed in accordance with section 17A(1) of the Act.

    (2) "Applicable turnover" means - 

(a) the amounts, determined in conformity with normal accounting practice in the United Kingdom, which are derived by a company from the provision of goods and services in the course of the company's regulated activities in respect of which the penalty is imposed, less sales rebates, value added tax and any other taxes based on such amounts; and

(b) payments by way of aid granted by a public body to the company, if the aid-


(i) facilitates or promotes the company's regulated activities; and

(ii) is reflected in the price charged by the company for the goods or services it provides.

Determination of turnover
     3.  - (1) Subject to paragraphs (2) to (4), for the purposes of section 22A(11) of the Act, the turnover of a company shall be the applicable turnover for the preceding business year.

    (2) Where the preceding business year is more or less than twelve months, the turnover shall be the applicable turnover in that business year divided by the number of months in that business year and multiplied by twelve.

    (3) Where there is no preceding business year, the turnover shall be the applicable turnover for the relevant year.

    (4) For the purposes of paragraph (3), where the period for which the company held - 

(a) an appointment as a relevant undertaker, or

(b) a water supply licence,

during the relevant year was less than twelve months, the turnover shall be the applicable turnover in that period divided by the number of months in that period and multiplied by twelve.

    (5) In paragraphs (3) and (4), "the relevant year" means the twelve months ending on the last day of the month preceding the month in which the date of the notice falls.


Elliot Morley
Minister of State, Department for Environment, Food and Rural Affairs

3rd March 2005

[2] 2003 c. 37.back

 © Crown copyright 2005