Different Types of Contracts
What is a rollover contract?
Unlike household energy contracts, nearly all gas and electricity business contracts are rollover contracts, this means that they automatically renew themselves if you do not terminate them with a letter of notice. Some suppliers renew over 90% of their customers in this way, rolling them over on to new, uncompetitive energy prices. Often the customer is unaware this is happening.
How do I avoid getting rolled?
Each energy supplier has different, and often complex, rules about renewing your business electricity or gas contract with them. They will usually write to you before your contract end-date to inform you of their intention to roll you over. This letter often triggers the opening of your renewal window, this puts the onus on you to terminate the contract in writing before the window closes again which - in many cases - can be as little as one or two weeks later. To find out which energy supplier's terms & conditions apply to you, call us on 0333 2200 555.
Does it make any difference if I'm a Not-for-Profit organisation?
According to the utility companies all not-for-profit / community buildings such as churches, village halls and Scout huts are treated in the same way as businesses. As with any business, we would advise not-for-profit organisations to continue to shop around for the most competitive deals.
Are there any other types of contracts to be aware of?
The other most common types of contracts for businesses are '28 Day' and 'Deemed Rates'.
What is a 28 Day contract?
Businesses that do not compare energy prices or have not attempted to switch energy suppliers since the market was de-regulated in the 1990s often find themselves on 28 Day supply contracts. The energy prices charged for these contracts can go up and down with the market and are rarely competitive. As such, we would always recommend a business switches on to a competitively-priced 'fixed-rate, fixed-term' contract for a minimum of a year - even with the same supplier. Thankfully, as the name suggests, switching to cheap business electricity can be carried out anytime after giving 28 days notice.
What are Deemed (or out-of-contract) Rates?
These rates are usually the worst and usually apply to businesses that are either new to the property or have terminated a contract but failed to switch to a new supplier. The good news is that, like 28 Day contracts, there is only a maximum of 28 days notice required to switch to a more competitive electricity rate.
What is Half-Hourly / 100kW supply?
Half-hourly meters are for energy-intensive businesses whose average peak electricity demand was greater than 100kW in any three months of the previous year. There are two simple ways of checking if you are a half hourly customer, a half hourly meter will often have a communications link so that meters can be read remotely on a daily basis. Alternatively if you check your meter reference number on your bill you'll see that it begins 00. We have a specialist team that arranges for the cheapest electricity prices to be sought from suppliers that cater for the half-hourly market. For further information please call us on 0333 2200 555.
What if I'm new to the property?
If you have just moved into a property, you will be supplied by the same business electricity supplier that the previous tenants used. However, this supplier is likely to be charging you out-of-contract rates which are significantly higher than average. It is important that you arrange a new commercial electricity contract for your business as soon as you can after moving in. If you call us with your new address, we can find out who your current supplier is and your meter serial number. We can then compare energy prices and advise you on the best option going forward. N.B A meter serial number (or 'meter ID') is different from a meter reference number. It is the 9 or 10 digit reference located on the actual meter itself that usually appears in the following format A12B 34567.
Can you install a meter in to a new site?
In this instance, we would advise you to contact your local business energy supplier, have them install a meter at your premises and enter a fixed-price contract with them on the minimum fixed-term contract they have available (usually a year but sometimes as short as nine months). Once you are on supply and have a meter reference number, we can search the market for a better deal to switch you over to once your initial contract expires.
Do I have to do anything to switch supplier?
Each supplier has different rules about terminating, by far the easiest way to switch is to let us guide you through the process. However if you prefer to do more of the legwork yourself, we can advise you on what you need to do.
What happens if my supplier objects to my transfer?
Giving sufficient termination notice should prevent your current supplier objecting to you leaving them (see OFGEM's termination window information). However, electricity suppliers may object on the grounds of outstanding debt or existing contract. Our service is geared towards making sure every switch to cheaper business energy suppliers happens smoothly and successfully. Given the high number of switching attempts that fail because of suppliers raising objections - legitimate or otherwise - we are very proud of our near 100% contract 'live rate'.
How long will it take to switch supplier?
It takes approximately 4-6 weeks to switch suppliers and we will oversee the whole process on your behalf. Rest assured, your supply cannot be cut-off as a result of switching! We will keep you up to date at each stage and you will have the direct phone number of your advisor if you have any questions. Furthermore, we will also be there for you throughout the term of the contract and, significantly, offer you a renewal reminder to ensure that you always have the freedom to choose the cheapest electricity / gas option at the end date.
What rate of VAT should I be charged for my gas or electricity?
VAT on electricity and gas for business is normally charged at 20%.
What is the Climate Change Levy?
The Climate Change Levy (CCL) is a Government tax which was introduced in 2001, on the use of energy by businesses, agriculture and the public sector which applies to both gas and electricity prices. The aim of the levy is to encourage industry, commerce and the public sector to improve energy efficiency and reduce greenhouse emissions.
Do any types of business qualify for 5% VAT and CCL exemption?
Residential / domestic buildings - including accommodation for children, the armed forces, care homes, rehab centres, hospices, monasteries & nunneries.
An institution which is the sole or main residence of at least 90% of its residents - except hospitals, prisons or similar institutions, hotels, inns or similar.
Self catering holiday accommodation, caravans & houseboats.
All of the above will qualify for a reduced rate of VAT on gas bills and electricity bills.