Can I have a business energy contract if I work from home?


The gig economy is showing no signs of slowing down and micro businesses are thriving, with 76% of UK businesses employing nobody aside from the owner.

If you’re one of the many who has started a business from home, you may have wondered about if you’re eligible for a business energy contract. In this guide, we tell you all you need to know:

Are sole traders working from home eligible for business energy?

If you are a sole trader and you work from home you may well be eligible for business energy. Additionally, you’ll probably meet the definition of a microbusiness, meaning you’ll be eligible for greater protection than larger businesses.

Micro businesses are those who:

Use less than 200,000 kWh of gas or 55,000 kWh of electricity a year,

Or

Have fewer than ten employees (or their full-time equivalent)

And

An annual turnover or annual balance sheet total of €2m or less.

How is business energy different from domestic energy?

Business energy is different from domestic energy in a number of ways:

  • It’s cheaper per unit, although added charges such as VAT and the Climate Change Levy do add up.
  • You’ll have commit for a specified contract length. This can be up to five years, but is more commonly two or three. During this time you’ll pay a fixed price for your energy units. This is because your supplier will buy the energy for the duration of your contract on the day you sign the contract – as opposed to purchasing for consumers which is done on a monthly basis. Energy prices are forecast to rise over the coming years, and you may want to be protected from increased costs.
  • As energy is purchased in advance, you will be charged a fee if you want to cancel your contract or switch suppliers before your contract has ended. 
  • If you don’t renew your contract when it runs out you’ll be moved onto pricey out of contract rates. We’d never recommend letting this happen as these rates are notoriously poor value for consumers.

Are you eligible for business energy in your home?

To switch to a business energy contract you’ll need to be able to prove that you are running a business and use a significant portion – usually 50% – of your energy to run your business. Whilst this may sounds like a lot, most people working from home and using lighting, heating and electricity for business purposes will be eligible. When you work out how much energy you use for business purposes remember to deduct appliances like fridges which would be on regardless from your figures.

What additional protection do micro businesses get?

Micro-businesses get an extra level of protection, to ensure that they aren’t taken advantage of by unscrupulous brokers or suppliers.

When firms work with a micro business they are required to put the end date and notice period on all fixed term contract bills, what’s more, microbusinesses benefit from a reduced notice period – just 30 days instead of 90. Smaller businesses can inform their supplier that they want to switch at any time in their contract, although the switch won’t actually occur until the notice period begins. When a microbusiness approaches the end of their contract, their supplier must let them know how much energy they’ve used throughout the contract, and what other deals are available to them.   

If you’re a small business and want to discuss your energy usage, call us on 0800 411 8830 or fill in our online quote form. 

 

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