Understanding your business energy bill
There isn’t a standard template for business energy bills.
There are over 50 different business energy suppliers competing for new customers in the commercial energy market, all which present their bill slightly differently.
But there are things they ALL have in common. Let’s explore the key elements of these bills together 👇
- Commercial property supply point
- Invoice details
- Tariff details
- Fuel Mix
- Charges: Standing charge, Unit charge, Energy supply charge, Climate Change Levy, VAT
- Total due
- Payment methods
What’s included in your business energy bill? 🤔
Let’s break down the key elements of a business energy bill:
* * *
1. Your commercial property supply point 🏢
A business energy bill will start by clarifying which property is being supplied electricity or gas. The bill will show:
- The address of your commercial property
- Your MPAN for an electricity supply point
- Your MPRN for a gas supply point
- Your energy meter ID
* * *
2. Your invoice details 📑
A business gas and business electricity supplier will usually invoice you once a month. Suppliers use the following identifiers to help identify a specific bill:
- Account number/Customer number – A unique number they have assigned to supply energy to your business.
- Bill number – A unique number assigned to the individual invoice.
- Bill date – The date the business energy bill was generated.
* * *
3. Your tariff details 📊
A business energy bill will show the details of the current contract you have agreed with your supplier. This includes:
- The name of your business electricity tariff/business gas tariff
- The date the tariff is due to renew
Your business energy supplier should also write to you between 60 and 120 days before the end of your contract to let you know it is about to expire. When you receive a renewal notice, it’s best to compare business energy prices to understand how competitive your renewal quote is.
For more information, here’s our full article for business energy contracts coming to an end.
* * *
4. Your tariff fuel mix 🔄
A business energy bill will display a fuel mix for your tariff. A fuel mix table shows how the energy you’ve been supplied was generated. The fuel mix will be entirely from renewable sources in a green business energy tariff.
* * *
5. Your business energy charges 💰
Your business energy bill will charge electricity and gas for a specific period, usually one month. The charges section of your bill will calculate the amount due for this period by adding up these separate charges:
a. Standing charge
Most business energy tariffs include a daily business standing charge price in pence per day. Your bill will calculate the standing charge for the period as follows:
The standing charge due can be calculated by:
Daily standing charge x Number of days in a month
b. Unit charge
In most business energy tariffs, you’ll pay for a specific agreed unit price per kWh of electricity or gas. The number of units used in the period will be estimated based using historical meter readings at your property.
The business energy charges section of your bill can be complicated, so here’s our full guide:
Your business energy unit charge will be calculated as:
Unit kWh consumed during the period x Agreed unit rate
You’ll receive a separate calculation for peak and off-peak periods where you have a dual-rate tariff.
Here’s our full article on calculating business energy usage.
d. Climate Change Levy
Most businesses pay a climate change levy for each unit kWh of electricity and gas consumed. Find out if your business needs to pay the climate change levy using the AquaSwitch guide here.
The business energy supplier will add VAT to the unit and standing charges. The VAT charged will either be at:
- The reduced rate of 5%
- The standard rate of 20%
See our complete guide on VAT for business energy.
* * *
6. Total amount due 🧮
A business energy bill will calculate how much your business owes. The amount due is calculated as the new charges in the period plus any previous unpaid bills.
* * *
7. How to pay 💳
A business energy bill will set out the different ways you can pay your supplier. The options will usually be:
- Direct debit – Your business energy supplier has permission to instruct a payment from your bank account under a direct debit scheme. If you have a direct debit set up, your payment will occur automatically.
- BACS – A BACS payment is a manual payment method that you can instruct your bank to make. The business energy bill will show the supplier company name, sort code and account number that you will need to set up this payment.
- Debit or credit card – Some business energy suppliers will accept card payments. The supplier will provide a number of their customer services department or a link on their website to receive the payment.
A business energy bill will have a due date; this is when your supplier needs to have received the amount owed on your bill.
* * *
Now that you understand all aspects of your business energy bill, here are answers to some frequently asked questions that often follow:
What is the Energy Bill Discount Scheme?
The Energy Bill Discount Scheme provides an automatic discount to the most expensive fixed energy tariffs entered into at the height of the energy crisis.
The scheme applies from 1 April 2023 to 30 March 2024. Check out our full guide to the Energy Bill Discount Scheme.
How can I save money on my business energy bill?
The commercial energy market is highly competitive, with many different suppliers competing on prices. At AquaSwitch, we’ve helped companies save thousands on their business energy bills by comparing a range of deals for them.
Find out how much you can save today using the AquaSwitch business energy comparison service.
Otherwise, an energy audit may help you identify areas where your business could become more efficient with its energy usage, regardless of their energy tariff.
How much is VAT on my business energy bill?
Most businesses pay VAT on electricity and gas supplies at the standard rate of 20%. However, if any of the following apply to your business, you can request a reduced rate of VAT at 5%:
- Charitable organisations.
- Where electricity or gas is used for domestic purposes.
- Small organisations that use less than 145kWh of gas or 33kWh of electricity per day on average
What to do if I can’t find my business energy bills?
If you haven’t received a business energy bill recently, we recommend requesting one from the customer services department of your supplier.
See our ultimate guide to business energy suppliers for your supplier’s contact information.
What is the average business energy bill?
The amount you need to pay on your business energy bill depends on how much energy your business consumes and the unit rate of energy you’ve agreed to in your tariff.
The average small business will consume 25,000 kWh per year of gas and 20,000 kWh per year of electricity.
Your business energy bill is calculated by multiplying the energy consumed by the fixed unit rate agreed in your tariff. Find out the unit rates currently being offered in the market using our business electricity comparison and business gas comparison tools.
Why are business energy bills increasing?
At the start of 2022, business and household energy renewal quotes increased significantly. The increases are driven by the underlying cost of natural gas purchased by the UK from the European markets.
How does backdating work in relation to your business energy bill?
Sometimes your business gas supplier must backdate your commercial energy bill if you’ve underpaid. Backdating can happen when you have been paying an estimated business energy bill rather than submitting regular meter readings.
An example would be that you pay £1,000 per month on your estimated bills; however, when you provide meter readings, your supplier calculates that you owe an additional £500 a month as you’ve used more energy than your supplier initially estimated.
Your business energy supplier will increase your bill to cover the additional business energy usage.