Managing a small business in the UK involves juggling numerous responsibilities, and understanding the intricacies of your energy supply shouldn’t be another hurdle. However, many business owners find themselves on deemed contracts without even realizing it, leading to unnecessarily high energy bills. This comprehensive guide aims to demystify deemed contracts, helping you navigate the complexities of energy supply agreements and potentially save money by switching to a new energy supplier.
What is a Deemed Contract?
In the energy market, a deemed contract is a binding agreement between a supplier and a customer that comes into effect automatically under certain circumstances. Typically, deemed contracts occur when:
- A business moves into new premises and starts using energy without agreeing to a contract with a supplier.
- An existing contract expires, and no new agreement is made.
Deemed contracts are legal and enforceable in the UK, but they often come with higher rates than negotiated contracts. Understanding your rights and options can empower you to make better decisions for your business.
Recognizing a Deemed Contract Situation
Identifying if you’re on a deemed contract is the first step towards taking control of your energy costs. Here are some signs that your business might be on a deemed contract:
- You’ve recently moved into a new business location and haven’t signed an energy contract.
- Your energy bills are noticeably higher than expected or have suddenly increased.
- You don’t recall signing an energy contract, or your contract has lapsed.
If any of these situations apply to your business, it’s likely you’re on a deemed contract. The good news is, you have the power to change this and potentially reduce your energy expenses.
The Impact of Deemed Contracts on Your Business
Being on a deemed contract can significantly affect your business finances. Energy suppliers often charge higher rates on deemed contracts compared to negotiated agreements. This means you could be paying more than necessary for your gas and electricity, affecting your bottom line.
Switching from a Deemed Contract
Fortunately, switching from a deemed contract to a more favorable energy agreement is straightforward in the UK. Here’s how to do it:
Step 1: Understand Your Current Situation
Gather information about your current energy supply, including supplier details and rates. This will be crucial when comparing offers from other suppliers.
Step 2: Shop Around
Contact different energy suppliers to get quotes. Be sure to mention that you’re currently on a deemed contract, as this might influence the rates and terms offered. You can find a list of authorised price comparison websites on Ofgem’s website.
Step 3: Choose the Best Offer
Compare the quotes and terms from different suppliers. Consider not only the rates but also the customer service, contract length, and any additional benefits.
Step 4: Make the Switch
Once you’ve selected a new supplier, they will guide you through the switching process. This typically involves filling out some paperwork and providing meter readings.
Step 5: Confirm the Switch
After you’ve submitted the necessary information, confirm the switch with both your new and old suppliers. This ensures a smooth transition and prevents any billing issues. Your broker must be registered with the Energy Brokers Dispute Resolution Scheme – check if a broker is registered on the Ombudsman Services website.
Benefits of Switching
Switching from a deemed contract to a negotiated agreement can offer several benefits, including:
- Lower energy rates, leading to reduced operating costs.
- More predictable energy expenses, aiding in financial planning.
- Better customer service and support from your chosen supplier.
Contend: Simplifying Legal Aspects of Energy Contracts
Understanding the legalities of energy contracts can be daunting, especially for busy small business owners. Contend is here to help. Our AI-driven legal assistance can guide you through the complexities of deemed contracts, offering clear, trustworthy advice tailored to your business needs. Whether you’re considering switching suppliers or simply want to understand your current contract better, Contend’s legal experts are just a chat away.
Conclusion: Taking Control of Your Energy Costs
Deemed contracts can be a costly oversight for small businesses in the UK. By recognizing when you’re on a deemed contract and understanding how to switch to a more favorable agreement, you can take control of your energy costs. Remember, the key to reducing your business expenses lies in staying informed and exploring your options.
At Contend, we’re committed to making legal guidance accessible and understandable. Our AI-driven platform is designed to simplify the legal aspects of running a business, including navigating energy contracts. Chat with our legal experts today and take the first step towards smarter energy management for your business.
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