The short answer
Business energy contracts are agreed individually and are not covered by the household price cap. To compare, gather your meter numbers (MPAN for electricity, MPRN for gas) and annual usage, note your contract end date and notice period, and compare unit rates, standing charges, contract length and terms. Renew before your contract ends to avoid out-of-contract rates, and ask how any broker is paid.
How business energy differs from household energy
Business energy has no price cap, is sold on individual contracts and usually requires you to manage renewal yourself.
- No price cap: prices are set in your contract with the supplier.
- Fixed terms are common, and you may need to give written notice to leave.
- If you don't agree a new contract, you may be moved onto out-of-contract or rollover rates, which are often higher.
- Suppliers usually carry out credit checks.
Business energy contract types
| Type | How prices work | Consider |
|---|---|---|
| Fixed-price | Unit rate and standing charge fixed for the term | Budget certainty; check renewal and exit terms |
| Variable / flexible | Prices can change during the term, sometimes linked to the wholesale market | Can move with the market; less predictable |
| Out-of-contract / deemed | Rates applied when no contract has been agreed | Often more expensive; avoid by renewing on time |
How to renew a business energy contract: step by step
- Find your contract end date and notice period in your current contract.
- Gather a recent bill for each meter showing your MPAN or MPRN and annual usage.
- Ask for quotations well before the end date — suppliers often let you agree a new contract in advance.
- Compare unit rates, standing charges, contract length, and renewal and exit terms.
- Check any broker cost information included in the quotation.
- Give written notice to your current supplier if your contract requires it.
- Confirm the new contract's start date lines up with the end of the current one.
What's on a business energy bill
A business energy bill usually includes unit charges, a standing charge, VAT and the Climate Change Levy.
- Unit rate — the price per kWh used.
- Standing charge — a fixed daily charge.
- VAT — usually 20% for business energy. The reduced 5% rate can apply where use is below the de minimis thresholds (33 kWh a day of electricity or 145 kWh a day of gas) or for certain qualifying uses, as set out in HMRC's VAT Notice 701/19.
- Climate Change Levy (CCL) — an environmental tax on business energy. Supplies that qualify for the reduced VAT rate are generally outside the main CCL charge; check HMRC guidance for your situation.
- Third-party costs — any broker commission included in your rates.
If you think the wrong VAT rate or CCL has been applied, speak to your supplier and check HMRC's guidance. This guide is general information, not tax advice.
Protections for microbusinesses
Ofgem gives microbusinesses additional protections, and energy suppliers must only work with brokers that belong to a qualifying dispute resolution scheme.
Ofgem defines a microbusiness as one that has fewer than 10 employees (or full-time equivalents) and an annual turnover or balance sheet of no more than €2 million, or that uses no more than 100,000 kWh of electricity or 293,000 kWh of gas a year. Since October 2022 suppliers have had to work only with brokers that are members of a qualifying dispute resolution scheme, giving microbusinesses a route to complain about a broker. For non-domestic contracts agreed from 1 October 2024, suppliers must provide information about broker costs included in the contract.
How energy brokers are paid
Energy brokers are usually paid commission by the supplier, normally included in the rates you pay.
Commission arrangements vary between brokers and suppliers. Ask any broker how it is paid and how much, and check the broker cost information your supplier provides. Using a broker is optional — you can also go directly to suppliers.
How Meridian can help
Meridian Merchant & Energy Solutions Ltd helps UK businesses explore business electricity and gas contracts from the third-party providers we work with, explains the options and costs in plain English, and tells you who you would be contracting with before you decide.
Meridian acts as an introducer, broker or reseller depending on the service. The provider supplies the service under its own terms and carries out its own eligibility checks. We may receive commission from providers — you can ask us about it at any time, and it is disclosed where the rules require. Submitting an enquiry is free and does not commit you to anything.
Related solutions
Frequently asked questions
Is there a price cap for business energy?
No. The energy price cap applies only to household customers. Business energy prices are set in your contract with the supplier.
What happens if my business energy contract ends and I don't renew?
Depending on your contract, you may be moved onto a rollover contract or out-of-contract (deemed) rates, which are often higher than agreed contract rates. Check your end date and notice period early.
What are an MPAN and an MPRN?
The MPAN (Meter Point Administration Number) identifies an electricity supply point, and the MPRN (Meter Point Reference Number) identifies a gas supply point. Both are shown on your bills and are needed for quotations.
Sources and further reading
- Ofgem — Third Party Intermediaries: what your microbusiness needs to know
- Ofgem — Ofgem confirms greater protection for businesses
- HMRC — VAT on fuel and power (VAT Notice 701/19 and internal manual)
This guide is general information for UK businesses, not financial, legal or tax advice. Rules and prices change — check the sources above and your provider’s terms before making decisions.