Business energy

Business gas and electricity are sold on contracts with no cooling-off period, so the price and term bind the business from the moment it agrees them. Ofgem rules require broker fees to appear in the contract's principal terms and let micro and small businesses take unresolved complaints to the Energy Ombudsman. A contract that ends without a new deal can move to out-of-contract or rollover rates.

Start a funding searchFind what fits

How business energy contracts work

A business energy contract sets a unit rate for each kilowatt hour and a daily standing charge, for gas and electricity separately, with taxes on top. On a fixed-term contract those rates hold until the end date. On a variable or rolling contract, sometimes called evergreen, the supplier can change the rates, and Ofgem's guidance is that you can switch to a new supplier at any time.

A fixed-term contract binds the business to its end date. Ofgem's guidance is that suppliers will not let you leave before then unless the contract has a termination clause or you pay an exit fee. Fixed contracts have a switching window that opens a few months before the end date, and you can sometimes switch in that window without a fee. A supplier can object to a switch if the business owes it money.

To quote, a new supplier needs the business's annual consumption and its meter details. The latest bill shows both, and it is the document Swoop asks for in its energy check, which also reviews the tariff and the VAT charged.

Ofgem's protections depend on the size of the business, measured by staff and turnover or by annual consumption. A business can fall into one band for electricity and another for gas, so quotes and protections for the two fuels can differ.

Ofgem's size bands

Under 10employees, with turnover or balance sheet up to £2 million, for a microbusiness
100,000 kWhof electricity a year, or 293,000 kWh of gas, as the alternative microbusiness test
Under 50employees, with turnover up to £6.5 million or balance sheet up to £5 million, for a small business
200,000 kWhof electricity a year, or 500,000 kWh of gas, as the alternative small business test

Source: Ofgem, Get a business energy contract; Energy Ombudsman eligibility guidance, checked November 2026

A banking hub on the high street in Abergele, Wales

Rollover, out-of-contract and deemed rates

When a fixed-term contract ends and the business has neither agreed a new deal nor switched, the contract decides what happens next. Some contracts renew automatically for a further fixed term, which Ofgem says can be at a higher rate. Some suppliers move the business onto out-of-contract rates, which Ofgem describes as more expensive than fixed-term contracts.

Deemed rates apply when the business uses energy with no contract in place: after moving into premises without arranging a supply, or when its supplier goes out of business. Ofgem describes deemed rates as higher than negotiated contract rates.

For microbusinesses on rolling contracts, Ofgem's rules cap the notice the business has to give to end the contract at 30 days, require the supplier to acknowledge a request to end the contract within five working days, and require the supplier to give renewal prices before the contract ends. Put the end date in the diary and start comparing when the switching window opens.

Brokers and commission

Brokers and price comparison sites compare suppliers on your behalf. Some charge an upfront fee. Others are paid commission by the supplier you choose, and that commission forms part of the price the business pays for the length of the contract.

Since 1 October 2024 Ofgem has required suppliers to show broker fees in the principal terms of contracts for all non-domestic customers, whatever their size, and to give that information on request. Since December 2024 suppliers may only work with brokers that belong to a redress scheme when securing contracts for small businesses. Ofgem names the Energy Ombudsman and the Utilities Intermediaries Association as schemes. Check a broker on the Energy Ombudsman's broker register or the association's list of accredited members before you agree anything.

Ofgem's guidance tells businesses to choose a broker with care, because there is no cooling-off period after you agree to a contract. Ask for the unit rates, standing charges, contract length, end date and broker fee in writing before you agree, by phone or online.

What a rollover can cost

Illustrative example

A business uses 40,000 kWh of electricity a year. Its fixed contract ends and it moves onto out-of-contract rates. Every rate here is assumed: 24p per kWh and 55p a day on a new fixed deal, against 34p per kWh and 80p a day out of contract.

New fixed deal, 40,000 kWh at 24p
£9,600.00
Standing charge, 365 days at 55p
£200.75
Out of contract, 40,000 kWh at 34p
£13,600.00
Standing charge, 365 days at 80p
£292.00
Extra cost of a year out of contract, before levy and VAT
£4,091.25

The climate change levy on 40,000 kWh at the main rate from 1 April 2026 is £320.40 on either contract. Using less energy lowers every line; energy efficiency grants for business covers funding towards the work.

Taxes on a business energy bill

Climate change levy
A tax on energy supplied to businesses, charged by the supplier and listed on the bill. The main rate for electricity and for gas is 0.801p per kWh from 1 April 2026, rising to 0.827p from 1 April 2027.
Climate change agreements
Energy-intensive businesses with an agreement with the Environment Agency pay a reduced levy. The discount on electricity is 92%.
Supplies treated as domestic
Small supplies count as domestic use even for a business: up to an average of 33 kWh a day or 1,000 kWh a month of electricity, and 145 kWh a day or 4,397 kWh a month of gas, at each premises. Domestic use is outside the climate change levy and takes the lower VAT rate.
VAT
Business supplies above those limits carry VAT at the standard rate of 20%. Qualifying supplies take the reduced rate of 5%, and where 60% or more of a supply is for qualifying use, the whole supply qualifies. In Great Britain, qualifying electricity is zero-rated from 1 October 2026 to 30 June 2027, after the Budget on 28 October 2026 extended the zero rate by three months. Northern Ireland stays at 5% for now, and the Budget expects relief there from April 2027.
Checking the bill
A business whose use sits under the domestic limits, or whose premises include living space, may be paying 20% VAT and the levy on energy that qualifies for relief. Swoop's energy check reviews the VAT charged on the bill you upload.

Complaints and the Energy Ombudsman

Taking a complaint further

Complain to the supplier or broker first, through its complaints process. If the complaint is not resolved after eight weeks, or you receive a deadlock letter, a microbusiness or small business can take it to the Energy Ombudsman, which also handles disputes with energy brokers. Citizens Advice helps micro and small businesses with their energy contracts.

Questions people ask

Is there a cooling-off period for business energy contracts?

No. Ofgem's guidance for business customers says there is no cooling-off period after you agree to a contract, and advises choosing a broker carefully for that reason. Before you agree, by phone or online, get the unit rates, standing charges, contract length, end date and any broker fee in writing, and check that the broker belongs to a redress scheme such as the Energy Ombudsman or the Utilities Intermediaries Association.

What happens when my business energy contract ends?

If you have not agreed a new deal or switched, the contract decides. Some contracts renew automatically for a further fixed term, possibly at a higher rate. Some suppliers move you onto out-of-contract rates, which Ofgem describes as more expensive than fixed-term contracts. Watch for the switching window, which opens a few months before the end date, and compare prices then.

What are deemed rates for business energy?

Deemed rates are what a supplier charges when a business uses energy without a contract, for example after moving into premises without arranging a supply, or when its supplier goes out of business. Ofgem describes them as higher than negotiated contract rates. Agree a contract as soon as you take over premises, and read the meters on the day you move in.

How do I find out how much commission my energy broker is paid?

Look at the principal terms of the contract. Since 1 October 2024 Ofgem has required suppliers to show broker fees there for all non-domestic customers, and to give the information on request. Ask the broker for the figure in writing before you agree, and compare quotes with the fee included.

Does my business have to pay the climate change levy?

A business pays the levy on gas and electricity it buys, at 0.801p per kWh from 1 April 2026, unless the supply is relieved. Supplies for domestic use are excluded, and small supplies under the de minimis limits, 33 kWh a day of electricity or 145 kWh a day of gas on average, count as domestic. Energy-intensive businesses with a climate change agreement pay a reduced rate.

Can a small business complain to the Energy Ombudsman?

Yes, if it qualifies. Since December 2024 the Energy Ombudsman has taken complaints from small businesses with fewer than 50 employees and turnover up to £6.5 million or a balance sheet up to £5 million, or that use up to 200,000 kWh of electricity or 500,000 kWh of gas a year. Complain to the supplier or broker first; the ombudsman can step in after eight weeks or once you have a deadlock letter.

Finance is subject to status and to the lender’s terms. A personal guarantee makes you liable for the company’s debt if it does not repay, and it can be enforced against your own assets, including your home. Nothing here is a personal recommendation.

Business savings

Business savings

Where a business's running costs go, and how a savings check compares them with other providers.

Read more →

Energy efficiency grants for business

Heat pump and chargepoint grants, Scotland’s cashback loans and Wales’s green loans.

Read more →

Business insurance

Compulsory employers' liability and motor cover, the other policies, and how the average clause cuts a claim.

Read more →

Working capital finance

How the trading cycle ties up cash, and which short-term finance fits each gap.

Read more →
All business funding

Start a funding search

Start a funding search

Funding searches run on Swoop’s platform. Swoop Finance Limited is a credit broker and not a lender, and is authorised and regulated by the Financial Conduct Authority (FRN 936513). Buzz Accounting Ltd introduces businesses to Swoop and may receive a fee from Swoop when funding is arranged. Business funding is separate from the financial advice Equity & General Financial Services Limited gives through this website. Finance is subject to status, and a lender may ask a director for a personal guarantee.

Cover for a personal guarantee

If a lender asks you to guarantee the company’s borrowing, our advisers can advise on life cover for that debt.

Request a meeting