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Business Electricity

Business Electric bills

When you get your business energy bill every month, it can be all too easy to just pay it and file it away. But, it’s really important to understand the information included on your bill, as it’ll tell you things like the type of tariff you’re on and how much you’re paying for your electricity. But, there’s so much information crammed in that it can be confusing - here’s how to make sense of it all.

How to read your business electricity bill

The first page of your bill includes a summary of how much you owe. It shows the balance brought forward from your last bill (minus any payments you’ve made), the charges you’ve incurred in the time since your last bill, and cancelled invoices, and finally - the total amount you’re due to pay.

Your electricity invoice will also give you detailed information about your meters, meter readings and the amount of electricity you’ve used. If you’ve got more than one meter, each one will be listed individually. If you run your business from more than one location, you should get a separate invoice for each location.

You may also find a statement summary showing the balance to pay taking into account payments already received.

You can expect to see the following information laid out in your invoice:

Energy suppliers take the location of your business, its size, the number of employees, its electricity usage pattern and its electricity efficiency into consideration when calculating your company’s unit cost and standing charge. This makes it hard to estimate how much your business can expect to pay for its standing charge without first assessing its individual situation. Nevertheless, you can get a rough idea by taking a look at average prices:

  • Meter number: this is the reference number shown on your meter
  • Meter readings: readings for this month with the present and previous dates
  • Tariff: details of the tariff you’re currently on
  • VAT % rate: the rate of VAT applied to your electricity charges
  • Charges: the charges you’ve incurred since your last bill
  • Loss of supply: the phone number your should call if you lose your electricity supply
  • Supply number (MPAN): your meter point administration number

Do you have to pay VAT on your business electricity bill?

Yes, you do have to pay VAT on your business electricity, and unfortunately you can’t claim it back, even though it’s a business expense. Most businesses pay VAT at a rate of 20%, but some are eligible for a discount. Your energy supplier will add the VAT automatically, so if you want to claim a discount, you’ll need to apply for it separately.

Make sure you know when your contract is due for renewal, so you don’t end up paying more than you need to.

What are the energy charges in your electricity bill?

As well as the wholesale cost of electricity, there are several other charges that make up the amount you pay each month. These won’t usually be listed separately on your bill but will be built in to the overall amount you’re charged.

  • Transportation and distribution costs: these charges cover the cost of transporting electricity from the National Grid to your business premises, plus a contribution towards the maintenance of the National Grid
  • Metering and management costs: these include the rental of your meter from a meter asset management company, to cover the cost of providing and maintaining the meter and any equipment that goes with it
  • Climate change levy: this is a tax applied by the government to encourage businesses to reduce their carbon footprint
  • VAT: a tax applied to your business energy costs, usually charged at 20% unless you’re eligible for a discount

How much is the average business electric bill?

The amount you pay for your business electricity can be affected by lots of things, including the location of your premises and how much power you typically use. But, this table should give you a rough idea of the average amount you can expect to pay, according to the size of your business.

Business size Average usage per year Price per kWh Total annual bill
Microbusiness 7,500 kWh 14.76p £1,213
Small business 20,000 kWh 14.28p £2,958
Medium business 35,000 kWh 14.04p £5,013
Large business 90,000 kWh 13.75p £12,470
Industrial 250,000 kWh 13.39p £33,566

The figures above are based on industry averages and are only intended as a guide. There are many factors that impact the amount you pay for your business electricity including consumption habits and the location of your business premises.

Most businesses in the UK use between 15,000 and 25,000 kWh of electricity a year. This means that the average business pays 14.36p per kWh, and a daily standing charge of 28p, with an annual bill of £3,061.

How to switch business gas supplier

We make it simple and straightforward to switch your business electricity supplier. Just give us a call on 0800 156 0871 and give us a few details about your business, including your current supplier, the tariff you’re on and the date it comes to an end, and we’ll do the rest. We’ll bring you quotes from a range of suppliers and help you choose the deal that gives you the best value for your business.

Once you’ve chosen a new deal, you can sit back and relax. We’ll pass your details to the new supplier, and they’ll handle the switch with your current supplier. Your new supplier will send you details of the switch-over date and a copy of your new energy contract - make sure you read this thoroughly before signing it, as there’s no cooling-off period with commercial energy deals.

When everything is agreed, you’ll need to take a meter reading on the day of the switch, and make sure you’ve paid any outstanding bills from your old supplier. And that’s it - you’ll be on your way to cheaper monthly bills.

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