Can I have a business energy contract if I work from home?
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The energy which powers your business is the same as that which powers your home, so you may assume that the commercial energy market operates in the same way as the domestic energy market. In fact, there are a number of key differences between the two. Knowing about these differences will help you understand how to find the best business energy deals, so we’ve put together a brief summary below.
In most cases, domestic energy contracts are rolling contracts with no definitive end date. Business energy contracts, on the other hand, are almost always fixed term deals. The fixed term is usually a period of one, two or three years, but can be as long as five years. There are some fixed price or fixed term deals available to households, but rolling contracts are most common amongst domestic customers.
Business energy prices are linked to ever-changing wholesale prices, so they change daily. Contrastingly, domestic energy prices do not shift with underlying market price changes, and are only likely to change once or twice a year.
There are a number of factors which make energy typically cheaper for businesses than households. The fact that there are much higher volumes of energy involved in business deals, for example, means that suppliers will sell it to businesses at much lower rates. Suppliers also offer bespoke prices to each business, making the market much more competitive. Conversely, domestic customers are charged the same for their energy as everyone else in their region – negotiation is not an option.
Businesses also save a lot of money on energy over time because of the nature of fixed term contracts. Their energy prices are usually fixed for the duration of their contract, meaning they’ll be unaffected by any significant rises in wholesale prices which occur during that period.
Another way in which business and domestic energy prices differ is that businesses and households pay different rates of VAT on energy. Domestic energy rates are subject to 5% VAT while business energy rates are subject to 20% VAT. Businesses are also required to pay the additional charge of Climate Change Levy on gas and electricity.
After entering a domestic energy contract, there is always a cooling off period during which the customer is free to cancel that contract. However, when it comes to the vast majority of business energy contracts, there is no such safety net. Businesses are deemed fully capable of entering a contract willingly and in full knowledge of the terms, so cooling off periods are not a feature of the market.
Businesses are not only denied a cooling off period – they’re usually completely unable to exit a fixed term contract any time before its end date. Domestic energy contracts can typically be ended any time because they simply keep rolling until the customer chooses to switch to a new one. Even in the less common cases where domestic customers have some type of fixed price or fixed term deal they will most likely have the option of ending their contract early for a small cancellation fee. This means that as a business owner, it’s much more important to be aware of and completely happy with the terms of any energy contract you’re about to enter.
"Very easy. Bea Luseni very efficient & knowledgeable."This review was posted by Alan Duffy on the 31st of March 2017
Super helpful and easy to work with
"Recommend this company in a heartbeat - Nicole Borneuf was super easy to talk to, was not pushy in the slightest, very helpful and replied with all my questions very professionally and did all she could to help. I had to deal with a few companies to sort my business energy out, all but Nicole were too pushy for my liking and I refused to follow through with them. Thank Nicole - you are a credit to your company, thank you for making the stressful energy change so easy."This review was posted by Mia Drew on the 29th of March 2017
An Extremely Competent Company
"Switch my business has not only helped my SME secure a good energy deal for the second year running but Jessica swiftly found a alternative supplier for me when I was let down on the day of switching by the new contractual provider I had chosen some 4 months previously. Being suddenly out of contract and without provider is everyone's energy nightmare. Greatest thanks."This review was posted by S McMillan on the 29th of March 2017
Helpful, friendly and we saved lots of money!
"Jessica Purnell was helpful and friendly, she made the whole process easy and simple AND we saved lots of money thanks Jess"This review was posted by Melanie Baker on the 23rd of March 2017
Quick & Easy
"Kabibi was very helpful and the whole process was very efficient. The one small reservation I had was that I was phoned up by Kabibi almost immediately having received my online quote - which wasn't enough time for me to finish reading the quotes! Fortunately she was able to assist me in a greater savings on both Gas & Electricity, and so as long as the switchover is seamless I will remain very happy with the service."This review was posted by Amanda Brown on the 21st of March 2017