Understanding your business energy bills
Understanding your business energy bills
Business energy bills can sometimes be confusing, but knowing what each part means can help you manage your costs and avoid any surprises. Here’s what you need to know to make sense of your bill and ensure you’re being charged correctly.
Typical charges on your business energy bill
Most business energy bills include several key charges:
Standing charge: This is a fixed daily amount you pay to cover the cost of supplying energy to your premises, regardless of how much you use.
Unit rate: This is the price you pay for each unit of energy (measured in kilowatt-hours, or kWh) you use. Your total usage is multiplied by this rate.
VAT: Business energy bills usually include Value Added Tax (VAT), typically charged at 20%. Some businesses, such as charities or those with low usage, may qualify for a reduced rate.
Climate Change Levy (CCL): Most businesses must pay the CCL, a government tax designed to encourage energy efficiency. Some exemptions may apply, such as for charities or businesses with low energy use.
Other fees or adjustments: These might include late payment charges, estimated usage adjustments, or charges for additional services.
How to read and check your bill
Your bill should clearly show:
The billing period covered
Your current tariff and contract details
Meter readings (both previous and current)
The amount of energy used (in kWh)
A breakdown of all charges
Check that your meter readings match those shown on your bill. If your bill is based on an estimate rather than an actual reading, you could end up paying too much or too little. Submitting regular meter readings helps ensure your bills are accurate.
Knowing your contract terms and tariff details
It’s crucial to understand the terms of your energy contract, including:
The length of your contract and when it ends
Your tariff type (fixed or variable)
Any notice periods or exit fees for switching suppliers
Renewal terms and what happens if you don’t take action at the end of the contract
Knowing these details can help you avoid being moved onto a more expensive tariff or facing unexpected charges.
How your business type affects your rights
Your rights as a business energy customer can depend on the size and type of your business. For example, microbusinesses benefit from extra protections, such as clearer contract information and shorter notice periods. To find out if you qualify and what this means for your energy bills, you can check if your business is a microbusiness.
Keeping good records
Keeping organised records of your energy usage, bills, and meter readings is essential. This can help you:
Spot any unusual increases in usage or charges
Resolve billing disputes more easily
Compare offers if you decide to switch suppliers
Provide evidence if you need to raise a complaint
Set a regular reminder to record your meter readings and keep copies of all bills, either digitally or in paper form. Good record-keeping makes it much easier to manage your energy costs and address any issues that arise.
Understanding your business energy bill puts you in control, helps you avoid overpaying, and ensures you can take action quickly if something doesn’t look right.
What to do if you have problems with your energy bills
If you’re facing problems with your business energy bills, you’re not alone – many small business owners encounter issues such as unexpected charges, estimated readings, or unexplained increases in costs. Addressing these problems quickly can help you avoid unnecessary stress and financial strain.
Common billing problems
Some of the most frequent issues include:
Incorrect charges: These may result from billing errors, such as being charged for the wrong tariff or meter.
Estimated readings: If your bills are based on estimated rather than actual meter readings, you might be paying more (or less) than you should.
Unexplained increases: Sudden spikes in your bill could be due to changes in your contract, errors in meter readings, or issues with your supplier’s billing system.
Steps to take if you suspect an error
Check your bill and meter: Compare the meter readings on your bill with the actual readings on your meter. Make sure the details – such as your business address and account number – are correct.
Gather evidence: Keep copies of all bills, correspondence, and photographs of your meter readings. This information can help you explain your case clearly.
Contact your energy supplier: Reach out to your supplier’s customer service team as soon as you notice a problem. Explain the issue and provide any supporting evidence. Ask for a detailed breakdown of the charges and clarification of how your bill was calculated.
Request a correction and timescale: If there’s an error, ask your supplier to correct it and confirm when you can expect a revised bill.
If your issue relates to broader concerns, such as contract disputes or mis-selling, you may also want to read about problems with your business energy supplier or broker.
Escalating your complaint
If your supplier does not resolve your issue promptly, you have the right to escalate your complaint. Follow these steps:
Submit a formal complaint: Write to your supplier, clearly stating the issue and what resolution you expect. Keep records of all communication.
Allow time for a response: Suppliers should respond within eight weeks. If they fail to do so, or you’re unhappy with their response, you can take your complaint further.
Understanding your rights and protections
As a business energy customer in the UK, you are protected by regulations overseen by Ofgem, the official energy regulator. Ofgem sets out rules requiring suppliers to treat customers fairly, bill accurately, and resolve complaints efficiently.
Your rights are also supported by legislation such as the Energy Act 2013, Section 9, which outlines key protections for energy users. For example, suppliers must provide clear information about how your bill is calculated and offer fair dispute resolution processes.
When and how to involve external dispute resolution
If your complaint is not resolved after eight weeks, or you receive a “deadlock letter” (where the supplier states they cannot resolve your complaint), you can refer your case to an independent dispute resolution service. For most small businesses, this is the Energy Ombudsman, who can review your case and make a binding decision.
Before escalating, check if your business qualifies for this service, as eligibility can depend on your size and energy usage.
For more information about your rights, complaint procedures, and dispute resolution, visit Ofgem, which provides practical guidance and up-to-date regulatory advice.
By taking these steps, you can address billing problems confidently and ensure your business is treated fairly under UK energy regulations.
Options for switching your business energy supplier
Switching your business energy supplier can be a straightforward way to reduce your energy costs and find a tariff that better suits your needs. With energy prices fluctuating and different suppliers offering a range of deals, regularly reviewing your options can help you keep overheads down and improve your business’s bottom line.
Why consider switching suppliers?
Energy is a significant expense for many small businesses. Suppliers often offer competitive rates to attract new customers, and you may be able to secure a better deal by switching, especially if your current contract is coming to an end. Some suppliers also provide fixed-rate tariffs, which can help protect your business from price increases and make budgeting easier.
How to find and compare business energy tariffs
Unlike domestic energy tariffs, business energy contracts are usually tailored to your specific usage and needs. To compare tariffs, gather details about your current contract, recent bills, and your typical energy consumption. You can then approach suppliers directly or use a business energy broker to get quotes. When comparing offers, look beyond just the unit price – consider standing charges, contract length, and any additional fees.
The switching process: what to expect
Switching business energy suppliers is generally a simple process:
Check your current contract: Find out when your contract ends and whether you’re in a fixed or variable period.
Get quotes and choose a supplier: Compare offers and select the tariff that best fits your business.
Notify your current supplier: Let them know you intend to switch. You may need to provide notice, depending on your contract terms.
Agree a start date with your new supplier: The new supplier will handle the switch and liaise with your old supplier to ensure a smooth transition.
Take a final meter reading: This ensures your final bill is accurate.
The switch typically takes a few weeks, but your energy supply will not be interrupted during this time.
For step-by-step details and further tips, see our guide on switching your business to a new energy supplier.
Important things to consider before switching
Before making a decision, check your current contract for:
Contract end dates: Most business energy contracts lock you in for a set period. You can usually only switch without penalty when your contract is ending or if you’re on a deemed or out-of-contract rate.
Exit fees: Some contracts include early termination charges if you leave before the agreed end date. Factor these into your cost comparison.
Notice periods: You may need to give your current supplier notice of your intention to leave. Failing to do so could result in being rolled over onto a new contract or facing delays.
Will switching affect your energy supply or billing?
Your physical energy supply will not be affected by switching suppliers, as the same pipes and wires are used regardless of who bills you. However, you may receive a final bill from your old supplier and a new billing schedule from your new supplier. Make sure to keep records of your final meter readings and confirm any outstanding payments to avoid disputes.
Switching can help your business access better rates and service, but it’s important to review all terms carefully and ensure the transition is well-managed. If you have questions or run into issues during the process, refer to our dedicated guide on switching your business to a new energy supplier for more in-depth advice.
Managing your energy supply when moving business premises
When moving your business to new premises, it’s important to manage your energy supply carefully to avoid unexpected charges or interruptions. Relocating can affect your energy billing, contract terms, and even the type of tariff you’re on. Here’s how to handle your energy supply before, during, and after your move.
Before you move
Start by reviewing your current energy contract. Most business energy contracts are tied to a specific address. This means you can’t simply transfer your existing contract to your new premises without notifying your supplier. Contact your energy supplier as soon as you know your moving date – ideally, give at least one month’s notice. This gives you time to discuss your options, such as ending your current contract or arranging a new one for your new location.
Take a final meter reading on the day you leave your old premises. Record this reading and send it to your supplier, along with a forwarding address for your final bill. This helps ensure you’re only charged for the energy your business has actually used.
During the move
On the day you move into your new premises, take an opening meter reading. This will be the starting point for your new energy bills and helps prevent disputes over previous usage. If you don’t provide a meter reading, you may be billed for energy used before you moved in.
If you’re taking over a property from another business, you’ll usually be placed on a ‘deemed contract’ with the existing supplier. Deemed contracts often have higher rates, so it’s a good idea to contact the supplier straight away to discuss your options or arrange a new contract.
After you move
Once you’ve settled in, check your first energy bill carefully. Make sure it matches the meter readings you provided and the terms you agreed. If you notice any discrepancies, contact your supplier immediately.
Moving premises may affect your tariff or contract terms. Some suppliers may charge exit fees if you’re ending a contract early, while others may offer to transfer your contract to the new address. Always check the terms and conditions of your agreement, as business energy contracts are not covered by the same cooling-off period as domestic ones.
If you’re considering switching suppliers at your new premises, compare tariffs and contract terms to find the best deal for your business needs. Planning ahead can help you avoid being placed on expensive default tariffs.
Avoiding billing issues
To prevent problems during your move:
Notify your supplier well in advance of your moving date.
Take and submit accurate meter readings at both your old and new premises.
Keep records of all communications with your supplier.
Review your new contract terms and check for any changes in tariffs or charges.
For more detailed guidance on dealing with your energy supply when you move business premises, see our dedicated section.
By staying organised and proactive, you can ensure a smooth transition and avoid unnecessary energy costs when relocating your business.
Getting help if you’re struggling to pay your business energy bills
If you’re finding it difficult to keep up with your business energy bills, you’re not alone. Many small business owners face cash flow challenges, especially during periods of rising energy costs or unexpected downturns. Recognising the signs early and knowing what support is available can help you avoid more serious problems, such as disconnection or legal action.
Recognising the Signs of Struggling with Energy Bills
Some common signs that your business may be struggling to pay its energy bills include:
Receiving reminder letters or warning notices from your supplier
Missing payment deadlines or making only partial payments
Using business overdrafts or credit cards to cover energy costs
Feeling anxious about upcoming bills or unsure how you’ll pay them
If any of these sound familiar, it’s important to take action promptly.
Financial Assistance and Support Options
There are several types of help available for small businesses facing energy bill difficulties:
Payment Plans: Most energy suppliers are required to work with you to agree a reasonable payment plan if you’re struggling. This might involve spreading payments over a longer period.
Grants and Schemes: In some cases, there may be grants or government-backed schemes designed to help small businesses with energy costs. Eligibility varies, so check what’s available in your area.
Supplier Support: Many suppliers offer dedicated support for business customers in financial difficulty. You can learn more about getting extra support from your energy supplier.
Communicating with Your Energy Supplier
It’s crucial to contact your supplier as soon as you realise you might have trouble paying. Under UK regulations, energy suppliers must treat business customers fairly and consider your circumstances. When you get in touch:
Explain your situation honestly and provide any relevant information about your finances.
Ask about options for payment plans or temporary payment holidays.
Keep records of all communication, including dates, names, and what was agreed.
Suppliers cannot disconnect your energy without giving you proper notice and offering reasonable opportunities to resolve the issue.
Managing Debt and Setting Up Payment Plans
If you already owe money on your energy bills, don’t ignore the problem. Ask your supplier about setting up a payment plan that works for your business. Under the law, payment arrangements should be realistic and based on your ability to pay. Make sure you understand:
The total amount you owe
How much you’ll need to pay each month
Any interest or fees that may apply
If you’re unsure what to do next, see our detailed guidance on struggling to pay your energy bills for step-by-step advice.
Where to Find Extra Support and Advice
If you’re worried about disconnection or legal action, don’t wait – seek help early. In addition to working with your supplier, you can:
Speak with a qualified business debt adviser for confidential support
Check for local business support organisations that may offer financial advice or grants
Review your energy usage and consider ways to reduce costs in the future
Remember, taking action early gives you more options and a better chance of keeping your business running smoothly. For more information on the help available, explore our guides on getting extra support from your energy supplier and struggling to pay your energy bills.
Further resources and related topics
Understanding your business energy bills is just one part of effectively managing your company’s energy needs. To help you navigate the wider picture, there are several related topics worth exploring. These resources offer practical advice and legal guidance on common challenges faced by small business owners, from moving premises to seeking extra support.
If you’re looking to understand your overall rights and responsibilities, our guide on energy issues for small businesses provides a useful overview of the legal landscape. This covers important regulations, such as the rights of microbusinesses under Ofgem rules, and highlights protections you may be entitled to.
If you are planning to relocate your business, it’s important to know the steps for dealing with your energy supply when you move business premises. This resource explains how to avoid unexpected charges and ensure a smooth transition with your supplier.
Many small businesses struggle with rising energy costs. If you are struggling to pay your energy bills, you can find information on payment plans, negotiating with suppliers, and the support available. You may also be eligible for getting extra support from your energy supplier, including financial assistance or tailored advice, especially if you meet the criteria for a microbusiness.
It’s important to check if your business is a microbusiness, as this status affects your legal protections and the way energy suppliers must treat you. For example, microbusinesses benefit from clearer contract terms and easier switching processes.
If you’re considering changing your energy provider, our guide to switching your business to a new energy supplier explains the steps, legal requirements, and what to watch out for to avoid hidden fees or service gaps.
Finally, if you encounter problems with your business energy supplier or broker, such as disputes over bills, poor customer service, or misleading sales practices, you’ll find advice on how to resolve these issues and where to escalate complaints.
We encourage you to explore these resources to strengthen your understanding and management of business energy matters. Taking proactive steps and knowing your rights can help you avoid common pitfalls, save money, and ensure your business is protected under current UK energy regulations.
