Moving Premises and Business Energy
We know that moving into new businesses premises can be stressful and important tasks, such as organising your...Read More
Understanding your business energy costs and your business energy bill can be just as confusing as comparing prices. Out guide should help.
When you get your business energy bill you’ll see it’s made up of different costs. The amount you’re charged doesn’t just depend on where your business is based but it’s also made up of different figures such as the standing charge, unit rate and environmental costs.
The Unit Rate is the price you pay per unit of gas or electricity used – your consumption. Depending on what type of meter you have may mean you have several different rates for electricity. For example, you may have day, night and weekend rates. The unit rate along with the standing charge are the prices you need to look at as explained in the article: Comparing the standing charge and unit rate.
You may be asked when you’re comparing energy prices if you are on “deemed contract rates” or “out of contract rates”.
Deemed contract rates refer to when a customer moves into new premises and simply uses the existing energy supply. It’s when the customer isn’t in contract with the existing supplier. They are called deemed rates because the consumer is deemed to have taken out a contract with the existing provider.
Out of contract rates refer to when a customer goes past the contract end date and has not agreed or accepted the renewal prices from the supplier. If this happens the supplier charges out of contract rates.
Both deemed contract rates and out of contract rates are more expensive than if you are in an agreed contract and so you shouldn’t be on these rates for longer than is necessary.
The standing charge is a fixed daily cost. It’s paid on top of your consumption charges. So no matter how much gas or electricity you consume you’ll pay the same amount to cover your standing charge.
The standing charge covers things like transporting your energy and looking after your meter.
The amount you pay in standing charges depends on where your business is located. It’s something everyone has to pay whether you’re a domestic or business consumer. However, some gas tariffs don’t have a standing charge but the unit rates will reflect this.
Your energy supplier is charged by the National Grid or the local distributor who owns the pipes and wires which transport energy around the country. It means that if your business is based in a rural area the standing charge may be higher than if it was based in a town or city because it will cost more to transport energy into the countryside. It may also cost more to repair damaged pipes or wires in a rural setting.
This is an environmental energy tax and it’s been part of business energy bills since 2001. It was introduced to try to help reduce greenhouse gas emissions. The Climate Change Levy (CCL) is made up of the main rates and the carbon price support rates. The main rates of the CCL apply to gas, electricity and solid fuels and should be listed on your energy bill.
How much you pay in CCL charges depends on which sector your business is in, whether that’s industrial, commercial or public services. But if you only use a small amount of energy then you won’t pay CCL charges. You will also be exempt if you are a charity.
Energy intensive businesses can enter into a climate change agreement with the Environment Agency to get a reduction on CCL rates. You can check if your business is eligible on the Gov.uk website.
If your business consumes less than 33kWh of electricity or less than 145kWh of gas per day then you may be eligible to pay VAT at just 5%. This also applies to charities and non-profit organisations such as churches. However, if you’re not eligible for this lower rate of VAT then you’ll pay the current rate of 20%.
Our dedicated pages have more information on business electricity and business gas. Our energy experts will be more than happy to help: just fill in our simple form (also at the top right of this page) or give us a call on 0330 0100 251 now.
"So helpful, especially as I found the contract renewal on my new half hourly meter quite baffling (KVA charges, MOP contracts and other "extras" all had me scratching my head). Arron took great care to explain everything clearly and told me everything I needed to know in order to be able to compare prices from all avenues on a level field. He didn't pester me endlessly for a decision did exactly as I asked in terms of call backs and quotations. Such a refreshing change to deal with someone who listens. Arron has helped me renew my contract next month through switchmybusiness in a very straightforward and painless way on an excellent rate. Fabulous service, thank you Arron."This review was posted by Louise on the 18th of January 2018
A lovely lady called Bhavni phoned me …
"A lovely lady called Bhavni phoned me very quickly after I went online. She couldn't have been more helpful, explaining all the different rates for me. She managed to save me a huge amount per year - gave me her direct phone number if I needed to phone again - like gold-dust! even gave me a termination letter to send to my supplier. Couldn't have been easier and will definitely use again - and hope I get to speak to Bhavni again. Thanks again"This review was posted by Julie Dickie on the 17th of January 2018
Excellent service and hassle free
"Excellent service and hassle free, Jessica Purnell handled everything for me and got us a great deal, even giving advice on how to cancel the previous contract. Thank You"This review was posted by Neville Blenkinsopp on the 17th of January 2018
"Brilliant service - very quick to the point and explained everything very well! Would recommend to anyone who is looking to change their electricity supplier."This review was posted by Jess on the 17th of January 2018
Excellent service straight to the point …
"Excellent service straight to the point and the process was painless!"This review was posted by Nick K on the 16th of January 2018