Business energy contracts explained for UK firms
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Quick answer: Business energy is not protected by the domestic Ofgem price cap — micro-businesses get some contract protections but must compare unit rates, standing charges, VAT at 20%, climate levy and rollover clauses. Notice periods and deemed rates after contract end are costly traps.
Comparison sites quote business gas and electricity separately from household tariffs. Contract law differs — rollover and auto-renewal rules were tightened for micro-businesses but larger firms negotiate bespoke deals. This hub explains fair comparison for shops, offices and home-based traders.
Micro-business vs larger contracts
Micro-businesses can switch with shorter notice and receive clearer renewal statements under Ofgem rules.
Larger firms negotiate bespoke contracts — broker access may help but fees apply.
Home-based businesses using domestic supply must sometimes move to business tariffs if usage is commercial — check supplier rules.
VAT, levies and climate charges
Standard 20% VAT applies to business energy unless qualifying for reduced rate — childcare, charities and some religious buildings may qualify.
Climate change levy appears on business bills — climate change agreements can reduce levy for eligible industries.
Compare p/kWh and daily standing charge using annual kWh from prior bills.
Contract end and switching
Mark contract end dates — deemed rates apply if you do nothing. Renewal windows open weeks before expiry.
Fixed business contracts may have volume tolerance clauses — exceeding expected use can trigger penalties.
Green business tariffs certify renewable matching — useful for ESG reporting but verify certification scheme.
Common questions
Can I use domestic energy working from home?
Light home working on a domestic tariff is often fine. Heavy business use may require a business meter and tariff — ask your supplier.
Is there a business price cap?
No domestic-style cap. Micro-business protections focus on contract clarity and switching — not maximum unit rates.
Do I need a broker?
Optional for micro-businesses on comparison sites. Larger multi-site firms often use brokers for volume pricing.