Guidance

Water resources licences: when and how you are charged

Updated 18 July 2023

Applies to England

• Publication for Northern Ireland
• Publication for Scotland
• Publication for Wales

In this document references to the ‘charging scheme’ mean The Environment Agency (Environmental Permitting and Abstraction Licensing) (England) Charging Scheme 2022.

1. General information about charges

If you abstract or impound water or plan to do so, you may need to apply for an abstraction or impounding licence. See the guidance check if you need a licence to abstract water. You do not need a licence if you abstract 20 cubic metres or less of water a day.

If you propose to abstract groundwater from an aquifer you will need to apply for a groundwater investigation consent. You use a different application process and there is no charge for it.

This section is about:

• the types of charges you will need to pay
• whether the charges are fixed or charged on a time and materials basis
• who must pay a charge
• what affects the charges

1.1 Application charge

You will need to pay an application charge when you apply for a new licence or to vary (change) an existing licence. The charge depends on the type of licence you are applying for or are varying. The application charge covers the work the Environment Agency does each time they determine (assess) a licence application.

If you are granted a licence, in subsequent years you may choose to vary or to revoke (cancel) it.

Find information about:

• varying a licence in section 3
• revoking (cancelling) an impounding licence in section 4

1.2 Annual charge

You may need to pay an annual charge for your licence. In the charging scheme the annual charge is referred to as ‘subsistence charge’. Sections 5 and 6 give more information on annual charges.

1.3 Time and materials application charges

Time and materials charging is used for:

• discretionary services the Environment Agency offers, for example enhanced pre-application advice (see section 2.3)
• applications of high public interest (see section 2.4.1)
• for applications that are competing with one another for the same water (known as competing schemes)

For the time and materials charge, the Environment Agency judges how much work is needed to assess a licence application. They will calculate what to charge you based on the appropriate hourly rate and then invoice you for that amount.

1.4 Who must pay a charge

The person applying for the licence must pay the application charge. For a variation, the person who holds the licence and is applying to vary it must pay the application charge.

The licence holder must make sure the annual charges are paid. The licence holder or their nominated representative can pay the charge.

1.5 No charge, reduced charge and special charge arrangements

Sometimes the Environment Agency does not apply a charge or they reduce a charge.

There is no application charge for:

• transferring a licence (from one person to another)
• an administrative change to a licence
• reducing an authorised volume on a licence
• revoking an abstraction licence

There is no annual charge for:

• a transfer abstraction licence – to move over 20 cubic metres of water a day from one source to another (or within the same source for certain activities) without an intervening use
• a temporary abstraction licence – to abstract more than 20 cubic metres of water a day over a period of less than 28 days
• an impounding licence – to create or alter an impoundment structure such as a sluice, weir, or dam
• a licence which authorises abstraction for direct use in the production of electricity or any other form of power by generating station or apparatus with a capacity of not more than 5 megawatts
• a licence for abstraction from inland waters which the Environment Agency or its predecessors has certified as having an average chloride content greater than 8,000 milligrams per litre

Special charge arrangements are in place for:

• abstraction licences authorising abstraction for spray or trickle irrigation – this charge agreement is called a two part tariff agreement
• licences that only authorise abstraction for the winter period – the winter period is from 1 November up to and including 31 March
• abstraction licences held by the Canal & River Trust that authorise abstraction from inland waters owned or managed by the Canal & River Trust
• abatement of annual charges in specific circumstances under s126 of the Water Resources Act 1991 for environmentally beneficial abstraction activities carried out under a full abstraction licence – see section 7.4 for when this can apply

2. Licence application charges

This section is about licence application charges and when you may need to pay extra application charges.

2.1 New licence charge

You must pay an application charge when you apply for a new licence. The charge depends on the type of licence you are applying for. You can find the application charges for different licence types in the charging scheme.

The application charge covers the work the Environment Agency carries out each time they determine a licence application.

There is an application charge for:

• a full licence – for most types of water abstraction over 20 cubic metres a day
• a transfer licence – to move over 20 cubic metres of water a day from one source to another (or within the same source for certain activities) without an intervening use
• a temporary licence – to abstract more than 20 cubic metres of water a day over a period of less than 28 days
• an impounding licence – to create an impoundment structure such as a sluice, weir, or dam
• an activity for the production of electricity, or any other form of power by a generating system or apparatus (including hydroelectric power)
• open-loop ground-source and water-source heat pumps
• renewing a time limited abstraction licence
• renewing a time limited variation to an existing abstraction licence

Some licence applications will need extra work that is not covered by the application charge. For these you will need to pay additional charges during the determination of your application. For example, if the Environment Agency needs to advertise the licence application or carry out an extra technical assessment of the application. See section 2.4 additional application charges.

2.1.1 Volume

For most types of abstraction, the application charge depends on how many megalitres per year (ML/yr) of water you are applying for.

There are different charges based on abstracting water:

• up to and including 50 ML/yr
• greater than 50 ML/yr up to and including 120 ML/yr
• greater than 120 ML/yr up to and including 1,400 ML/yr
• greater than 1,400 ML/yr and above

1,000 cubic metres (m³) = 1 megalitre (ML)

1 million gallons = 4546.09 cubic metres (m³)

Contact the Environment Agency if you need advice on how to work out your abstraction volume.

The volume of water you are applying for or are licensed to abstract is important information for the Environment Agency. This is because it partly determines the complexity of the application and any potential impact the application may have on existing abstractors and the environment.

If you are applying for an abstraction licence for a ‘transfer re-abstract’ scheme, the Environment Agency may consider the aggregate volume limits when working out which volume band applies to your application. A transfer re-abstract scheme is one where the first abstraction takes water from a source of supply and moves it to one of the following:

• to another source of supply from where it will be abstracted for a second time
• to a reservoir from where it will be released back into the original source of supply and abstracted again

2.1.2 Water availability

For most types of abstraction, the application charge will depend on local water availability. You will pay a higher charge if one of the following applies:

• your proposed surface water abstraction is in a catchment with ‘restricted water available’ or ‘no water available’
• your proposed groundwater abstraction is in a groundwater body at ‘poor status’

This charge is for the extra work the Environment Agency does to assess the application and manage water in these catchments.

If your proposed groundwater abstraction is not in a groundwater body, then the surface water catchment water availability applies. If your proposed surface water or groundwater abstraction is in a catchment with ‘water available’ or a groundwater body in ‘good status’ you will pay a lower charge.

The Environment Agency does not need to consider water availability when they determine applications where all the water is returned to the same source of supply. For example, fish passes, licences for hydroelectric power (HEP) schemes and heat pumps. Water availability is not included in the application charge for these types of activities.

You can find out the water availability for your proposed abstraction location by searching the water resources charges mapping tool.

2.1.3 Hydroelectric power charge

The application charge for abstraction and impounding licences for HEP schemes is based on the scheme’s output power and its risk rating. The risk rating is low or high. The risk rating of your proposed scheme depends on whether:

• it is located where migratory fish are present
• the flow requirements are more than those given in Appendix 1: Hydroelectric power water abstraction levels

2.1.4 Heat pump charge

The application charge for open-loop ground-source and water-source heat pumps is based on how many megalitres per year (ML/yr) of water you are applying for. Water availability is not included in the application charge because all the water is returned to the same source of supply.

2.1.5 Charge for environmentally beneficial activities

The application charge for an environmentally beneficial activity is:

• £135 for abstraction licences
• £1,500 for impounding or transferring water

An environmentally beneficial activity is a non-commercial activity undertaken solely for the purpose of environmental benefit. It is not to meet a statutory or regulator-imposed requirement. For example:

• wet fencing and nature conservation
• flood irrigation, including water meadows, warping and pest control
• fish passes (only if it is not part of another application for an abstraction or impounding licence)
• transferring water between sources
• weir removal

2.2 Basic pre-application advice

The Environment Agency can provide a limited amount of pre-application advice to help you complete your application. They can provide this for any type of licence application.

The basic pre-application service includes generic advice on the following:

• the type of licence you need for your activities
• the correct application forms and guidance to use
• where additional application charges may apply
• how to calculate the correct application charge

Read the relevant Environment Agency guides and talk to the Environment Agency before you apply. This will help you get your application right first time which means you will get a decision more quickly.

2.3 Enhanced pre-application service

This is a discretionary service which you can request if you want more help with your application. The Environment Agency charges an hourly rate plus VAT for the enhanced pre-application advice service.

This enhanced service could include advice on:

• submitting relevant information
• complex modelling
• monitoring requirements
• specific assessments

The Environment Agency will give you a written estimate before they start work and you will need to agree it in writing. This will include:

• a breakdown of the work they will carry out with costs
• when these costs will be charged (approximately)

If they receive new information from you (or others) that means they need to revise their estimate, they will tell you what this is and agree it with you in writing.

2.4 Additional application charges

2.4.1 High public interest applications charge

The Environment Agency decides whether an application is of high public interest on a case-by-case basis.

To reach their decision they consider all the relevant information, including:

• whether the interest relates to issues regulated under an environmental licence
• the breadth and scale of interest – for example, the number of different sources such as individuals, interest groups, businesses, local councillors, media and whether there is ongoing engagement from the local MP
• whether the interest is, or is likely to be, sustained for a period of time

An application can become high public interest at any stage. The Environment Agency will review their decision if circumstances change.

When the Environment Agency decides an application is high public interest, they tailor their consultation to the particular circumstances.

For licence applications and changes (variations), they may do one or more of the following:

• consult for more than 20 working days
• publicise more widely, for example, public drop-in events, press releases, social media, and adverts
• consult on the draft licence and the draft decision document

The Environment Agency will use the time and materials charge for this extra work.

2.4.2 Advertising charge

Some applications have to be advertised. If the Environment Agency needs to advertise your application in a newspaper, they will need to recover the cost of placing the advert.

They will charge you an administrative charge plus the actual cost of the advertisement for each application advertised.

2.4.3 Water undertaker (as regulated by Ofwat) charge

There is an additional charge for applications from water undertakers (regulated by Ofwat) where the licence applied for is for abstracting for public water supply, or for supporting the provision of public water supply.

This charge covers the extra work the Environment Agency carries out to regulate licences held by water undertakers. For example, to prepare, assess and evaluate statutory Water Resource Management Plans and Drought Plans.

The water undertaker charge does not apply to:

• minor variations
• same terms renewals
• temporary licences

2.4.4 External consultation charge

The Environment Agency has a statutory requirement to consult with a number of organisations when proposed abstractions or impoundments could adversely impact sites designated as important in respect of landscape, heritage or conservation, or when an abstraction or impoundment could impact on water levels in watercourses managed by internal drainage boards. These organisations are:

• the National Park Authorities
• the Broads Authority
• internal drainage boards

Consulting these organisations allows the Environment Agency to fully understand any impacts an abstraction may have on the local environment, wildlife, flood protection and water level management. There is an additional charge for this work.

2.4.5 Conservation assessment charge

The Environment Agency must carry out an assessment of potential impacts of a proposed abstraction or impoundment on designated conservation sites or protected species where relevant. They may need to consult with Natural England on these assessments to fully understand any potential impacts. There is an additional charge for this work.

2.5 Amending your application

If you want to amend your application before the Environment Agency has determined it and the changes are substantially different, they may ask you to withdraw your application. They will then ask you to apply again with the correct information and this will incur another application charge.

2.6 Competing schemes charge

The Environment Agency may receive applications to abstract the same water. These are known as ‘competing schemes’.

The Environment Agency will usually do extra work, such as working out which scheme, if any, is best in the public interest.

The time and materials charge applies to this work.

2.7 Time limited licences charge

Some licences and licence conditions have an expiry date. When the expiry date is reached, you will need to apply for one of the following:

• a new (replacement) licence
• to vary your licence to replace any expiring conditions to carry on abstracting as you do now

If you do not apply to replace an expiring licence or conditions, then it will expire and no longer be valid.

If you apply for a new licence on the ‘same terms’, which means you make no changes other than to extend the expiry date, the Environment Agency will charge £135.

You can also apply for a new licence on ‘different terms’ if you wish to make changes to your abstraction licence. The charges for this are given in tables 3.5 and 3.6 in the charging scheme.

The additional application charges described in section 2.4 also apply to a ‘same terms’ or ‘different terms’ renewal, where applicable.

2.8 Partial refund of an application charge

The Environment Agency will check your application to make sure it is complete and that they can accept it as ‘technically valid’. This means they have enough information to start to determine your licence application. The Environment Agency will contact you if information or payment is missing.

If the Environment Agency cannot progress your application past this stage for any reason, they will return it to you and refund the application charge minus 20% to cover their costs to that point. The amount they can keep is capped at £1,500.

They will not charge this if they return an application after having done very little work because it contained obvious errors or omissions.

If you withdraw your application between the ‘technically valid’ and ‘determination’ stages, they will normally keep your application charge to cover their costs. However, if appropriate, they may refund some of your charge.

2.9 Charges for multiple applications

You must pay the correct charge for each application. You may get a discount when you submit more than one application. The discount reflects the time the Environment Agency saves if they can determine the applications together. For example, by only needing to consult once for more than one application.

You can get a discount if the proposed applications are reasonably considered to be part of the same operation and the Environment Agency can determine them together.

You pay the full application charge for the highest charge, and you get:

• 90% discount for each additional activity that is part of the same operation and from the same source of supply (except for renewal applications and applications for environmentally beneficial activities)
• 50% discount for each additional activity that is part of the same operation and from a different source of supply

You will pay once for each additional application charge (see section 2.4) that applies to your application where the Environment Agency can carry out a joint assessment.

You must pay the full charge for each application if the applications are not part of the same operation. This means they operate independently of each other.

Example application charge for multiple activities from the same source

A quarry operator wants to carry out 2 abstractions at the same site and from the same source of supply. Each needs a licence.

The abstraction activities authorised are:

• transfer abstraction licence: volume category 120 ML/yr up to and including 1,400 ML/yr (water available)
• full abstraction licence from surface water and groundwater: volume category 50 ML/yr up to and including 120 ML/yr (water available)

The application charge is the sum of:

• 100% of the highest application charge for the transfer licence at £5,368 (charge category 3.9.3 in table 3.9 of the charging scheme)
• 10% of the application charge for the abstraction licence from surface water and groundwater at £4,301 (charge category 3.1.2 in table 3.1 of the charging scheme)

Example application charge for multiple activities from different sources

A farm operator wants to carry out 3 activities at the same site from 2 different surface water sources and a groundwater source. As the sources are different, these are classed as separate activities, and each require a separate licence.

The activities are:

• licence from surface water: volume category 50 ML/yr up to and including 120 ML/yr (restricted water available) from surface water source A
• licence from surface water: volume category 50 ML/yr up to and including 120 ML/yr (restricted water available) from surface water source B
• licence from groundwater: volume category 120 ML/yr up to and including 1,400 ML/yr (water available) from a groundwater source C

The application charge is the sum of:

• 100% of the highest application charge for the licence from groundwater at source C at £10,752 (charge reference 3.1.3 in table 3.1 of the charging scheme)
• 50% of the application charge for the licence from surface water at source B at £7,323 (charge reference 3.2.2 in table 3.2 of the charging scheme)
• 50% of the application charge for the licence from surface water at source A at £7,323 (charge reference 3.2.2 in table 3.2 of the charging scheme)

2.9.1 Multiple HEP applications

HEP schemes typically need different types of licences, for example an impounding licence and a transfer abstraction licence. There is an application charge for each licence type. The Environment Agency assesses HEP schemes as a whole, so the time needed to determine additional HEP activities is reduced.

For multiple HEP applications you pay the full application charge for the highest charge, and you get:

• 90% discount for each additional activity that is part of the same operation whether abstracting from the same or different source of supply

You will pay once for each additional application charge (see section 2.4) that applies to your application where the Environment Agency can carry out a joint assessment.

Example application charge for a HEP scheme

A HEP operator wishes to carry out 2 activities – an abstraction and an impoundment.

The activities are:

• abstraction for the production of electricity with an output of greater than 50 and up to and including 100 kilowatts – low risk
• impounding

The application charge is the sum of:

• 100% of the highest charge at £10,546 (charge reference 3.3.5 in table 3.3 of the charging scheme)
• 10% of the next highest charge at £10,546 (charge reference 3.3.5 in table 3.3 of the charging scheme)

2.9.2 Multiple heat pump applications

Ground and surface heating and cooling schemes typically need licences and permits from different regimes. For heat pump applications involving surface water or groundwater discharge activities and abstraction activities there is a reduced application fee.

You pay the full application charge for the highest charge, and you get:

• 90% discount for each additional activity that takes water from or discharges it back to the same source and can reasonably be considered to be part of the same operation

2.9.3 Applications under different permitting regulations

You may need to apply for an abstraction licence and an environmental permit. Non-water resources applications that are part of the same operation are charged for separately, except for heat pump applications as set out in section

2.9.4. See Environmental permits: when and how you are charged.

3. Vary a licence charge

When you apply to vary (change) a licence you must pay an application charge if the Environment Agency considers that any of the following apply:

• they need to carry out a technical assessment
• they need to consult on your variation
• you are making several significant changes to a licence

Depending on the change to the licence, you can apply for:

• an administrative change (no charge)
• a minor variation
• a normal variation
• a substantial variation

3.1 Administrative only application

The Environment Agency do not charge for administrative only variations because they:

• do not need any kind of technical input
• do not affect licence conditions
• are likely to take less than 2 hours to process the change

You must pay a variation charge if you are making administrative changes on a significant number of licences, or several changes to one licence.

Here are some examples of administrative only variations:

• change or correct a name or address or trading title
• transferring a licence between abstractors
• vesting a licence on death or bankruptcy of holder
• revoking an abstraction licence, including when part of a permanent licence is traded
• updating the aggregate volume condition on a licence but only to refer to a renewed licence number or to remove an expired or revoked licence number

See section 4 for guidance and charges for revoking an impounding licence.

3.2 Minor variation charge

A minor variation is one that meets all of the following criteria:

• needs minimal technical input because it will not affect the environment, protected rights or existing lawful users
• does not change the extent of the licence conditions, for example you cannot increase the volume or change the abstraction point
• does not need external consultation

You must apply for a normal or substantial variation if your changes do not meet these criteria.

Here are some examples of minor variations:

• apportioning a licence
• updating the aggregate volume condition on a licence to refer to the new licence being aggregated to it but with no change in aggregate volume
• removing a purpose (use) from a licence if separate quantities are not specified for each purpose – the licence holder cannot abstract for a different purpose at a greater rate
• removing an abstraction point where separate quantities are not specified for each point – the licence holder cannot abstract from a different point at a greater rate
• reducing the authorised volume

The Environment Agency will charge £830 for a minor variation.

There is no charge to reduce the authorised volume on a licence. This includes when you permanently remove any of the abstraction points or purposes from the licence, because you are reducing the abstraction quantity associated with those abstraction points or purposes to zero.

3.3 Normal variation charge

A normal variation is change which meets all of the following criteria:

• a change to one or more conditions of the licence
• requires the Environment Agency to do a technical assessment, but not a full reassessment (like for a new application) – this includes if they did this before they received your application to vary the licence
• is likely to need internal or external consultation

Here are some examples of normal variations:

• adding or changing an abstraction purpose (use)
• adding or changing an abstraction point
• increasing the volume of water to be abstracted, hourly, daily or annually
• changing a gauging station or observation borehole referred to in a licence condition
• changing the lining in an abstraction borehole referred to in a licence condition

You can find the normal variation charges for each licence type in Chapter 2: Water resources application charge tables in the charging scheme.

3.4 Substantial variation charge

A substantial variation is one where you apply for multiple changes to an existing licence that:

• will require a full reassessment because the extent of the changes means the original assessment is no longer valid
• means the Environment Agency will need to spend a similar amount of time determining the application to the time they spend on a new licence application

For example, applying to change the purpose, increase the volume and move the abstraction point.

You can find the substantial variation charges for each licence type in Chapter 2: Water resources application charge tables in the charging scheme.

3.5 Water rights trading charges

Abstraction licence trading is an agreement between 2 parties where a licence holder (seller) agrees to sell some or all of their water rights to someone else (buyer). The application charges that apply will depend on the type of trade being made. The different types of trade are:

• a whole licence permanent trade – where the buyer must apply for a new full abstraction licence or a normal variation, and the seller must apply for an administrative variation to revoke the licence
• a whole licence temporary trade – where the buyer must apply for a new full abstraction licence or a normal variation, and the seller must apply for a minor variation to temporarily reduce the annual quantity to zero
• a part licence permanent trade – where the buyer must apply for a new full abstraction licence or a normal variation, and the seller must apply for a minor variation to permanently reduce the annual quantity
• a part licence temporary trade – where the buyer must apply for a new full abstraction licence or a normal variation, and the seller must apply for a minor variation to temporarily reduce the annual quantity

There is no cost to the seller because there is no charge for reducing the authorised volume on a licence.

4. Revoke an impounding licence

If you want to revoke an impounding licence you may have to pay a charge. Here are the circumstances and the associated charges.

You have an impounding licence, but you have not constructed the works. There is no charge for this application to revoke a licence.

You have a licence, and the impoundment has been constructed. You want to remove the impoundment. You will apply to the Environment Agency to revoke the licence and they will impose removal conditions. Once you have met these, they will revoke your licence. The time and materials charge is used for this application as set out in the charging scheme.

You have constructed an impoundment but do not have a licence. You must apply for a licence to remove the works. The impoundment licence application charge applies. Once the conditions of the licence are met, you must apply to revoke the licence. There is no application charge for the revocation.

5. Annual charge

The annual charge is payable for the time your licence is in force, regardless of whether you are abstracting water, including for all, or part of a financial year. This charge covers the costs of the work by the Environment Agency to protect the environment and the rights of licence holders.

Section 1.5 explains when there is:

• no annual charge
• a reduced annual charge

The annual charge is based on:

• the source of supply (tidal or non-tidal)
• the authorised volume for abstraction
• the purpose of abstraction
• water availability
• the need for specialised modelling

There is an additional annual charge when the Environment Agency do extra work for some licence holders. For example, where:

• they regulate licences held by water undertakers (as regulated by Ofwat) that authorise water abstraction for public water supply, or which support the provision of public water supply
• support is provided so the abstraction can take place (supported sources)

You only pay for the activities that are relevant to your abstraction licence.

6. How to work out your annual charge

You need the following information from your abstraction licence to help work out your annual charge:

• source of supply
• authorised annual volume – may be written in gallons (gal), metres cubed (m³) or megalitres (ML)
• purposes of abstraction
• periods of abstraction (when you are authorised to abstract water)
• national grid reference of abstraction points
• whether your licence includes a condition which links it with another licence
• if your abstraction points are located in an area where water availability is ‘restricted’ or ‘no water available’
• whether your abstraction needs specialised modelling

You also need the following information:

• if your licence is held by a water undertaker (regulated by Ofwat)
• whether your abstraction requires a supported source to enable you to abstract water

You can get this information by working through the following sections. If you have collected the information and need help to work out your annual charge you can get advice from the Environment Agency. The water resources annual charge indicator tool is currently unavailable.

Refer to the charging scheme to work out your charge if you have a complex or aggregate licence.

6.1 Source of supply

Where you abstract water from (source of supply) will affect your annual charge.

Your licence will state whether you abstract from:

• non-tidal surface water or groundwater
• tidal surface water

You need this information to identify your charge category or categories.

6.2 Purpose of abstraction

The use for the water (purpose) determines how much is ‘lost’ and how much is returned to the environment.

There are 3 loss categories:

• high loss – this includes activities that remove water from the source of supply and do not return it to that source after use, for example trickle or spray irrigation
• medium loss – this includes activities that remove water from the source of supply and partially return it to the environment, for example, general washing, general farming (excluding trickle and spray irrigation) and domestic
• low loss – this includes activities that return the water directly to the source of supply (close to the abstraction point) from which the water is taken, for example, aqua-culture, water-based cooling

The more water that is lost, the higher the annual charge. This is because the monitoring, assessment, and compliance activities the Environment Agency carries out increases as the loss category moves from low to high. This reflects the higher potential for negative effects on the environment.

Where an abstraction purpose is unspecified, The Environment Agency will consider this activity a high loss until it can be agreed otherwise. If your licence has more than one purpose you may have more than one loss category.

If your licence has one purpose, follow the guidance given in section 6.2.1.

If your licence has more than one purpose, follow the guidance given in section 6.2.2.

6.2.1 Licences authorising one purpose

You need to identify the loss category and total abstraction volume.

1. Use the loss category table in the charging scheme to identify the loss category that relates to the purpose stated on your licence.

2. Use your licence to identify the total volume in megalitres per year (ML/yr) that you are authorised to abstract annually.

1,000 cubic metres (m³) = 1 ML

1 million gallons = 4546.09 cubic metres

Contact the Environment Agency for advice on how to work out your abstraction volume or if your licence does not include annual volumes.

6.2.2 Licences authorising more than one purpose

If your licence authorises you to take water for more than one purpose, your annual subsistence charge may have more than one charge category. Your total charge will be the sum of all the applicable charge categories. Here are some examples which illustrate this.

Where a licence authorises 2 purposes with the same loss category, then the total volume the licence authorises for abstraction determines the charge category.

Where a licence authorises 2 purposes with different loss categories and each purpose has an annual authorised volume. This means the licence has 2 charge categories. One for each volume of water authorised for each loss category. The charge categories are added together to give the total annual charge.

Where a licence authorises 3 purposes. Two purposes have the same loss category. The third purpose has a different loss category. The licence specifies a combined annual authorised volume for the 2 purposes with the same loss category and a separate annual authorised volume for the purpose with the different loss category. This licence has 2 charge categories which are added together to give the total annual charge.

You need to identify the loss category and total abstraction volume.

1. Use the loss category table in the charging scheme to identify the loss category that relates to each purpose(s) on your licence.

2. Use your licence to identify the total volume in megalitres per year (ML/yr) you are authorised to abstract annually for each purpose(s) on your licence.

Contact the Environment Agency for advice on how to work out your abstraction volume or if your licence does not include annual volumes.

6.3. Water availability

Part of your annual charge is determined by how much water is available in your area. You will pay a higher charge if either:

• your surface water abstraction is in a catchment with ‘restricted water available’ or ‘no water available’
• your groundwater abstraction is in a groundwater body at ‘poor status’

This charge is for the extra work the Environment Agency does to assess the application and manage water in these catchments.

If your groundwater abstraction is not in a groundwater body, then the surface water catchment water availability applies. If your surface water or groundwater abstraction is in a catchment with ‘water available’ or a groundwater body with ‘good status’, you will pay a lower charge.

You can find out the water availability for your abstraction location by searching the water resources charges mapping tool. An abstraction location can be a single point, a reach (stretch of water) or an area.

Tidal abstractions do not incur a water availability charge.

6.4 Specialised modelling charge

The Environment Agency does specialised modelling work for water resources management which helps understand the effect of abstraction. If your abstraction is in a ‘tier 1’ or ‘tier 2’ model area, you will pay a higher annual charge. If your abstraction is in an area with no model you will pay a lower charge.

You will be charged for the extra work the Environment Agency does if either your:

• groundwater abstraction is located in a model area
• surface water abstraction is located in a model area where the model includes surface water and groundwater abstractions

You can find out if your abstraction is in a model area by searching the water resources charges mapping tool. An abstraction location can be a single point, a reach (stretch of water) or an area.

This additional modelling charge will still apply if your abstraction is from tidal waters.

6.5 Additional annual charges

You will pay a higher annual charge if you benefit from any extra activities the Environment Agency does that enables you to abstract water.

You will need to identify if the following cost factors apply to you:

• if your licence is held by a water undertaker (regulated by Ofwat)
• whether your abstraction requires a supported source to enable you to abstract water

6.5.1 Water undertaker (as regulated by Ofwat)

The Environment Agency does extra work for licences held by water undertakers (regulated by Ofwat) that authorise the abstraction of water for public water supply, or to support the provision of public water supply. There is an extra charge for this work.

The charge covers the additional activities they do to regulate those licences, such as assessing and evaluating statutory Water Resource Management Plans and Drought Plans.

You can find the relevant charges in Part 2: Water resources application charges and Chapter 4: Additional charges in the charging scheme.

6.5.2 Supported sources

The Environment Agency incurs costs to manage and operate assets which support surface water and groundwater resources. This allows abstractors to have access to water at times when, under natural conditions, there could be no water available for abstraction.

Supported sources can be:

• surface waters or water in aqueducts supported by reservoir releases
• surface waters supported by transfers from other surface waters
• surface waters supported by groundwater augmentation
• specified parts of groundwater aquifers significantly supported by any of these 3 supported surface waters
• surface waters impounded by assets owned and regularly adjusted by the Environment Agency to protect and maintain water levels required by major abstractions upstream

You can find out if your abstraction needs support by searching the water resources charges mapping tool. An abstraction location can be a single point, a reach (stretch of water) or an area.

You may have to pay the supported source charge if:

• your licence has a condition limiting abstraction to times when the Environment Agency is operating assets to support the surface water and groundwater levels and flow
• there is a section 20 agreement which requires the Environment Agency to operate assets they own to support abstractions
• the groundwater modelling indicates your groundwater abstraction is supported by the operation of assets owned by the Environment Agency, or by water from a surface water supported source
• you abstract water upstream of an Environment Agency impounding structure which is regularly adjusted to protect or enable abstractions from the impounded reach

The supported source charge does not apply if:

• your licence has a condition limiting abstraction to times when the Environment Agency is not operating an asset
• your licence authorises abstraction of 1% or less of the water available for abstraction from a surface water supported source
• an abstraction from a groundwater supported source that has no measurable effect on the available water for abstraction, or is so small in proportion to the unsupported resource in the aquifer, or the support into the aquifer, that the abstraction makes no material difference

The water resources charges mapping tool will not identify if these exclusions apply. Contact the Environment Agency if you need more advice on whether your abstraction will incur the supported source charge.

6.6 Identify your charge category or categories

You now need to use all the information you have gathered from the previous sections to find out your charge category or categories.

If you have an abstraction licence that authorises abstraction from multiple points, for multiple purposes, or you have 2 or more licences in an ‘aggregate authorised volume’ group, go to section 6.7 to identify your charge categories.

To summarise, you need:

• the source of supply (non-tidal or tidal)
• the loss category for all points on the whole licence, or for each specified point
• the total volume of water you are authorised to abstract for each loss category
• the water availability status
• whether all or any specified points of abstraction benefit from specialised modelling
• if your licence is held by a water undertaker (regulated by Ofwat)
• whether all or any specified points of abstraction require a supported source to enable you to abstract

You will need to select the charge category for each loss category using the total water you are authorised to abstract for that loss category. You need to do this for:

• each point on the whole licence
• each specified point, where the points have different water availability status, are in or outside a modelled area, or are in or out of a supported source

You need to select the charge category for the points based on the purpose (water use) and volumes you are authorised to take at the points. You need to do this if you have points with different cost factors, for example your proposal:

• has a different water availability status to other abstraction points
• does or does not require a supported source to enable you to abstract
• is inside or outside a modelled area
• is by a water undertaker (regulated by Ofwat)

You may have more than one charge category. The total annual charge for your abstraction is the sum of all charge categories appropriate for your licence as set out in the charging scheme.

Here are some examples of how to work out the charge category or categories.

Example 6.6.1

A single licence authorises non-tidal abstraction for:

• 100 ML/yr for public water supply (medium loss)

A condition in the licence authorises abstraction from 2 points.

Both points are in a water available area, not in a modelled area and do not require a supported source.

For this licence there is one charge category based on charge reference 4.5.1 (table 4.5 in the charging scheme): medium loss non-tidal abstraction of water greater than 83 up to and including 142 ML/yr where no model applies. Plus the water undertaker charge.

Example 6.6.2

A single licence authorises non-tidal abstraction from 2 points where:

• point A is authorised for 100 ML/yr for spray irrigation (high loss)
• point B is authorised for 100 ML/yr for mineral washing (low loss)

Both points are in a water available area and not in a modelled area.

The licence authorises abstraction from 2 separate points with a total of 200 ML/yr.

For this licence there are 2 charge categories based on:

• charge reference 4.6.1 (table 4.6 in the charging scheme): high loss non-tidal abstraction of water greater than 85 up to and including 120 ML/yr where no model applies
• charge reference 4.4.1 (table 4.4 in the charging scheme): low loss non-tidal abstraction of water up to and including 5,000 ML/yr where no model applies

The sum of the 2 charge categories is the annual charge.

Example 6.6.3

A single licence authorises non-tidal abstraction from 1 point for 2 purposes:

• 100 ML/yr for mineral washing (low loss) and spray irrigation (high loss)

A condition limits the total annual abstraction to 100 ML/yr.

The 2 charge categories are:

• charge reference 4.4.1 (table 4.4 in the charging scheme): low loss non-tidal abstraction of water up to and including 5,000 ML/yr where no model applies
• charge reference 4.6.1 (table 4.6 in the charging scheme): high loss non-tidal abstraction of water greater than 85 up to and including 120 ML/yr where no model applies.

As this licence allows 100 ML/yr for either purpose the charge is based on the highest charge. The charge category for this licence is based on the second charge reference (4.6.1) for non-tidal high loss with an annual abstraction of 100 ML/yr.

6.7 Aggregate licences

Your licence may authorise water abstraction from one or more points and for one or more purposes or be linked to other licences in a group (known as an ‘aggregate licence’). If it is, your annual charge will depend on the type of licence you have.

The charge category will depend on:

• the purposes and total aggregate volumes authorised across the licences
• the points where the licence authorises you to abstract from

The charge category will be based on the total aggregate volume authorised.

Where a licence specifies more than one purpose with different loss categories, the highest charge is calculated based on the aggregate authorised volume and using the factors set out in section 6.4. The charge is then apportioned across all the licences in the aggregate group.

Contact the Environment Agency for advice on how to work out your aggregate licence charge.

Here are some examples of working out the annual charge for an aggregate licence.

Example 6.7.1

A single licence authorises non-tidal abstraction from 1 point for 2 purposes:

• 75 ML/yr for spray irrigation (high loss)
• 100 ML/yr for mineral washing (low loss)

Each purpose has a specified quantity:

• non-tidal high loss with an annual abstraction of 75 ML/yr
• non-tidal low loss with an annual abstraction of 100 ML/yr

The licence is in a water available area, not in a modelled area and does not require a supported source.

For this licence there are 2 charge categories based on:

• charge reference 4.6.13 (table 4.6 in the charging scheme): high loss non-tidal abstraction of water greater than 50 up to and including 85 ML/yr where no model applies
• charge reference 4.4.1 (table 4.4 in the charging scheme): low loss non-tidal abstraction of water up to and including 5,000 ML/yr where no model applies

The sum of the 2 charge categories is the annual charge.

Example 6.7.2

A single licence authorises non-tidal abstraction from 1 point for 2 purposes:

• 75 ML/yr for spray irrigation (high loss)
• 100 ML/yr for mineral washing (low loss)

A condition limits the total annual abstraction to 100 ML/yr.

The licence is in a water available area, not in a modelled area and does not require a supported source.

For this licence there are 2 charge categories based on:

• charge reference 4.6.13 (table 4.6 in the charging scheme): high loss non-tidal abstraction of water greater than 50 up to and including 85 ML/yr where no model applies
• charge reference 4.4.1 (table 4.4 in the charging scheme): low loss non-tidal abstraction of water up to and including 5,000 ML/yr where no model applies

The first category is based on the maximum volume that you can take at the highest charge, and the second on the remaining volume that you can take at the next highest charge. For this licence, it is:

• non-tidal high loss with an annual abstraction of 75 ML/yr
• non-tidal low loss with an annual abstraction of 25 ML/yr

The sum of the 2 charge categories is the annual charge.

Example 6.7.3

Licence A authorises non-tidal abstraction for:

• 100 ML/yr for public water supply (medium loss)

Licence B authorises non-tidal abstraction for:

• 75 ML/yr for public water supply (medium loss)

Licence A and B are in a water availability area, not in a modelled area and do not require a supported source. Both incur the water undertaker cost factor.

Aggregate conditions limit the total annual abstraction across the 2 licences to 100 ML/yr.

For these aggregate licences there is one charge category based on:

• non-tidal medium loss with an annual abstraction of 100 ML/yr with the water available, plus the water undertaker cost factor

Charge reference 4.5.1 (table 4.5 in the charging scheme): medium loss non-tidal abstraction of water greater than 83 up to and including 142 ML/yr where no model applies.

The annual charge for the charge category is apportioned between the 2 licences based on the total cost of each licence as if they were not in aggregate.

Example 6.7.4

There are 3 licences.

Licence A authorises abstraction of 100 ML/yr for public water supply (medium loss) from a non-tidal source.

Charge reference 4.5.13 (table 4.5 in the charging scheme): medium loss non-tidal abstraction of water greater than 83 up to and including 142 ML/yr where no model applies.

£1,162 plus water undertaker charge at £92, total charge £1,254.

Licence B authorises abstraction of 75 ML/yr for spray irrigation (high loss) from a non-tidal supported source.

Charge reference 4.6.13 (table 4.6 in the charging scheme): high loss non-tidal abstraction of water greater than 50 up to and including 85 ML/yr where no model applies.

£1,162 plus supported source charge (Lower Yorkshire Derwent) at £271, total charge £1,433.

Licence C authorises abstraction of 50 ML/yr for industrial use (medium loss) from a non-tidal source that benefits from specialised modelling.

Charge reference 4.5.8 (table 4.5 in the charging scheme): medium loss non-tidal abstraction of water greater than 25 up to and including 83 ML/yr where a Tier 1 model applies.

Total charge £538.

Aggregate conditions limit the total annual abstraction across the 3 licences to 150 ML/yr.

The first category is based on the maximum volume you can take at the highest charge, and the second on the remaining volume you can take at the next highest charge. For this licence, it is:

• non-tidal abstraction of 75 ML/yr at high loss plus the supported source charge
• non-tidal abstraction of 75 ML/yr at medium loss plus the water company charge

The annual charge is apportioned between the 3 licences based on the cost of each licence if they were not in-aggregate.

Where a licence or licences have a maximum volume that is authorised across a number of years, you will calculate the charge based on the maximum authorised volume over the period stated on the licence and divide it by the number of years stated on the licence to arrive at an annual charge. Where there is more than one point or purpose on a licence or across aggregate licences, the principles for charging for aggregates would apply using the average volume that could be taken across the period stated on the licence.

7. Special charges

Special charge arrangements are in place for:

• two-part tariff agreements for spray or trickle irrigation
• winter only abstraction
• the Canal & River Trust
• abatement of annual charges
• time and material annual charges

7.1 Two part tariff

If you carry out spray or trickle irrigation you may be able to enter into a special charge agreement with the Environment Agency. This charge agreement is called a two part tariff agreement. Your licence must specify an annual authorised volume for spray or trickle irrigation only.

Two part tariff agreements allow the annual charge to be split into 2 parts:

• basic charge – you pay 50% of the charge based on your annual authorised quantity – this charge is invoiced through the annual bill run in April
• supplementary charge – this is 50% of the charge based on the actual abstracted quantity you report to the Environment Agency and is payable after the abstraction season

If you have a two part tariff agreement, you must submit abstraction returns (the volume of water you have abstracted) to the Environment Agency, even if you did not abstract any water. If you do not, your charge is calculated on the full authorised quantity having been abstracted.

7.2 Winter only abstraction

A 50% reduction to your annual charge applies if your abstraction licence authorises you to abstract water during the winter season only. The winter season is from 1 November up to and including 31 March.

This reduction does not apply to licences that authorise abstraction outside of the winter period, even if the authorised quantities are specified for different periods.

7.3 Canal & River Trust licences

The Environment Agency applies a 50% discount to the annual charge for licences held by the Canal & River Trust which authorise abstraction from inland waters that Canal & River Trust owns or manages.

7.4 Abatement of annual charges

Abstractors who meet a set of criteria, can apply to have all or part of the annual charge removed. The Environment Agency generally agrees an abatement using all of the following criteria:

• the abstraction is for environmental benefit
• the abstraction contributes to the duties and responsibilities of the Environment Agency
• the licence holder does not gain commercially from the abstraction

Examples include abstraction that:

• supplement flows to a wetland to support wading bird populations
• increase the water level in a pond to support a designated special wildlife site, which has been affected by reduced groundwater levels as a result of others’ abstraction
• increases flow to a number of wildlife ponds to improve water quality issues caused by others

If you think your abstraction meets these criteria, contact the Environment Agency for more information and to apply.

7.5 Time and materials charges

The Environment Agency charges time and materials costs for dealing with an unplanned event that could cause significant harm to the environment. For example, over abstraction of water through equipment failure.

Charging for time and materials allows the Environment Agency to recover costs quickly for the additional regulatory effort resulting from:

• dealing with the outcome of an unplanned event
• investigating the cause of an unplanned event

Time and materials charging also allows the Environment Agency to recover the costs of:

• any consultants, contractors, or equipment they may need to use
• carrying out community engagement work that may be needed

If they need to charge you for time and materials, they will keep you informed of any costs incurred and how they are broken down.

Where they can already recover costs for unplanned work they may continue to do so. The Environment Agency will only ever charge once for a specific event.

8. Effect of revoking and varying a licence

If you revoke, vary or transfer (to another party) your licence during the financial year, the Environment Agency will calculate your annual charge by apportioning the charges for the financial year, or for the period of the year during which the water is licensed to be abstracted.

9. Compensation charge

The charging scheme includes a compensation charge for recovering the costs relating to revoking or varying abstraction licences under section 52 of the Water Resources Act 1991. It can also be used to recover compensation costs associated with refusing applications or curtailing abstraction in relation to the removal of exemptions from abstraction licensing control (sections 26 and 29 of the Water Resources Act 1991).

In recent years the Environment Agency has not raised a compensation charge. they will continue to suspend this charge. However, they still have the ability to use this power and would carry out a public consultation before doing so.

Water undertakers and sewerage undertakers cannot claim compensation for regulator-initiated reduction or removal of abstraction licences.

10. Invoices

10.1 Issue date for invoices

In most cases, the Environment Agency will send you an invoice at the beginning of April. The charging year is from 1 April to 31 March.

10.2 When annual charges start

Annual charges are due from the effective date of your licence and in April each following year.

11. How to pay for charges

11.1 Payments for applications

You need to pay the application charge when you send an application to the Environment Agency. For example, this could be an application:

• for a new licence
• to vary an existing licence
• to revoke an existing licence

Consider the environment, email the application to: PSC-Waterresources@environment-agency.gov.uk

Or you can post the application to:

Permitting and Support Centre Water Resources Team
Environment Agency
Quadrant 2
99 Parkway Avenue
Sheffield
S9 4WG

Tel: 03708 506 506 (see call charges)

You can pay application charges by:

• credit or debit card (Visa, Mastercard, Maestro UK)
• electronic transfer (BACS)
• cheque

If you wish to pay by credit or debit card let the Environment Agency know and they will contact you when they receive your application.

Include an Environment Agency reference number or licence number with your payment, particularly if you are making an electronic payment. This will make sure your payment can be identified and matched to your application.

11.2 Other payments

The Environment Agency will send an invoice for annual subsistence, and time and materials charges that will set out details of how to pay.

You can pay by:

• Direct Debit (preferred method)
• electronic bank transfer
• card (not American Express)
• cheque

Include an Environment Agency reference number or licence number with your payment. This will make sure your payment can be identified and matched to your application or invoice.

11.3 Non-payment of charges

If an application is received without the correct payment, the Environment Agency cannot class it as ‘technically valid’.

If you have not paid the full application charge, the Environment Agency will ask you to pay the balance. If you do not pay within the deadline they set, they cannot determine the application and will return it to you.

If you do not pay the additional application charges, the Environment Agency will progress with your application and take action to recover the debt.

If you do not pay the annual charge when it is due, the Environment Agency may revoke or suspend your licence and take action to recover the debt.

If you have not paid the charges for a discretionary service you requested, the Environment Agency may refuse to provide any more discretionary services until payment is received. However, they will still progress with the formal application where they can.

11.4 Complaints about charges

If you wish to complain about your charges, or ask the Environment Agency to review a decision they have made about your charges, please see their complaints procedure.

11.5 When charges are due

You must provide payment with your application when you apply for:

• a new licence
• varying a licence
• revoking an impounding licence

You must pay the following invoices when they are received:

• a licence variation made by the Environment Agency
• fixed and time and materials charges for work to determine an application

The Environment Agency normally invoice other time and materials charges in arrears.

They usually issue invoices for annual charges at the beginning of April and you must pay them when you receive the invoice. Or, in the first year the licence is granted, you will receive a pro rata invoice when your licence is issued. You must pay this when you receive the invoice.

11.6 Mid-year adjustments to a licence

If you have already paid the annual charge in full and you vary your licence after 1 April and before 31 March, the change may put your account into credit. The Environment Agency will refund any money due back to you.

11.7 Contact us

For billing queries, please contact the address on the back of your invoice.

If you have any questions about how to work out your charges, please contact the Charges Team.

Email: enquiries@environment-agency.gov.uk

Post:

Charges Team
Environment and Business Directorate
Environment Agency
Horizon House
Deanery Road
Bristol
BS1 5AH

Telephone: 03708 506 506 (see call charges)

The Environment Agency welcomes views from their users, stakeholders, and the public, including comments about the content and presentation of this guidance.

If you are happy with the service, please tell them. It helps them to identify good practice and reward their staff.

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