WATER INDUSTRY, ENGLAND AND WALES Citation and commencement 1 This Order may be cited as the Water Industry (Determination of Turnover for Penalties) Order 2005 and shall come into force on 1st April 2005. Interpretation 2 1 In this Order— “ the Act ” means the Water Industry Act 1991; “ aid ” means a measure which— fulfils the conditions set out in Article 1.1 of the Agreement on Subsidies and Countervailing Measures contained in Annex 1A to the WTO Agreement, and is specific within the meaning of Article 2 of that Agreement, irrespective of whether the recipient deals in goods or services; “applicable turnover” shall be construed in accordance with paragraph (2); “the Authority” means, until the coming fully into force of section 36(1) of the Water Act 2003 (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 relevant undertaker prepares a single set of regulatory accounts; or a water supply licensee or sewerage licensee publishes a single set of accounts or, if no such accounts have been published for the period, prepares a single set of accounts; ... “date of the notice” means the date on which the enforcement authority gives notice under section 22A(4) of the Act; “person” means a relevant undertaker or a water supply licensee or a sewerage licensee; “preceding business year” means the last business year preceding the date of the notice; “regulated activities” means— in the case of a person holding an appointment as a water undertaker, its functions as a water undertaker; in the case of a person holding an appointment as a sewerage undertaker, its functions as a sewerage undertaker; in the case of a water supply licensee, the activities authorised by its water supply licence; or in the case of a sewerage licensee, the activities authorised by its sewerage 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; “sewerage licence” is to be construed in accordance with section 17BA(1) of the Act; 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 person from the provision of goods and services in the course of the person’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 person , if the aid– i facilitates or promotes the person’s regulated activities; and ii is reflected in the price charged by the person 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 person 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 person held— a an appointment as a relevant undertaker, ... b a water supply licence, or c a sewerage 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