Supplier mis-billing, distinct from back-billing, arises when a business is overcharged due to estimated reads, a wrong tariff, a wrong meter, or an administrative error. Businesses have the right to a full account audit and to recover overpayments with interest under Ofgem's licence conditions. The limitation period for contractual claims in England and Wales is 6 years under the Limitation Act 1980.
Last reviewed: 12 May 2026
The Distinction Between Mis-Billing and Back-Billing
Mis-billing and back-billing are related but legally and practically distinct situations. Back-billing refers to the practice of a supplier billing a customer for a prior period of consumption that was previously under-billed, typically because estimated reads were too low and the correction emerges later. Ofgem's back-billing rules for microbusinesses place limits on how far back a supplier can recover an undercharge. The existing guide at /business-energy-back-billing-uk/ covers that route.
Mis-billing is the reverse situation: the supplier has over-billed the customer. The excess charge may result from estimated meter reads that were higher than actual consumption; the wrong unit rate applied because the contract tariff was entered incorrectly on the supplier's system; charges billed against the wrong meter; the billing of a previous tenant's consumption to the current occupier; or a system or administrative error that generated incorrect invoice amounts. In all these cases, the business has paid more than it should have under the contract or deemed arrangement, and it has a right to recover the difference.
Establishing Overpayment: The Account Audit
The first step in recovering a mis-billing overpayment is establishing precisely what has been charged and what should have been charged. A business that suspects mis-billing should formally request a full account audit from the supplier in writing. The request should specify the period under review, the basis for the concern, and the documentary evidence sought, including all actual and estimated meter reads used in billing, the unit rates applied in each billing period, the tariff code under which the account was billed, and all invoices for the period.
Suppliers are obligated under their Ofgem licence conditions to maintain accurate billing records and to provide customers with the information needed to verify billing accuracy. A supplier that refuses to provide the account history and read data used in billing may be in breach of its licence obligations and this refusal should form part of any formal complaint.
Cross-referencing the supplier's read data against the customer's own actual meter readings for the period is the most direct way to identify overcharging from estimated reads. Where the contract tariff rate applied differs from the signed contract rate, the discrepancy is evidenced by comparing the invoice unit rate against the rate specified in the contract documentation.
Ofgem SLC 21B and the Obligation to Refund
Ofgem's Standard Licence Condition 21B imposes obligations on suppliers regarding billing accuracy and the handling of billing errors. Under SLC 21B, suppliers are required to take reasonable steps to ensure that bills are accurate, to correct billing errors promptly on discovery, and to refund any resulting overpayments to customers.
The obligation to refund extends to interest on the overpaid amount in some circumstances. Where a supplier has retained funds that were not owed under the contract for a period, the customer may be entitled to interest on those amounts. The basis for interest depends on the contract terms and applicable law; general contract law principles regarding money had and received, combined with the supplier's specific licence obligations, support an interest claim in cases of significant or prolonged mis-billing.
The practical route to enforcing these obligations begins with a formal complaint to the supplier. The complaint should specify the period of the alleged overpayment, the amount claimed, the evidence supporting the claim, and a request for both a full refund and a corrected billing history for the period.
Time Limits: The Limitation Act 1980
The Limitation Act 1980 sets a six-year limitation period for contractual claims in England and Wales. A business seeking to recover overpayments from mis-billing can in principle claim for any overcharge in the six years immediately preceding the date of the claim. Overpayments made more than six years before the claim was formally raised are outside the primary limitation period and recovery becomes significantly more difficult.
This six-year window means that businesses discovering a long-running billing error should act promptly to preserve their full recovery entitlement. Delays in raising the claim allow the limitation period to roll forward, progressively excluding earlier overpayments from recovery. A formal complaint to the supplier constitutes notice of the claim for limitation purposes.
Scotland operates under different limitation rules. Claims in Scotland are subject to the Prescription and Limitation (Scotland) Act 1973, under which a five-year prescriptive period applies to obligations arising from breach of contract. Businesses in Scotland should note this shorter period when calculating the recoverable window.
The Energy Ombudsman's Approach to Overpayment Disputes
For qualifying microbusinesses, the Energy Ombudsman provides an accessible route to resolving billing disputes without litigation. The Ombudsman can investigate mis-billing complaints, direct suppliers to provide account audits and corrected bills, and award financial remedies including full refunds of evidenced overpayments.
The Ombudsman's approach to mis-billing disputes is evidence-based: the customer needs to demonstrate, using available meter read data and contract documentation, that an overpayment occurred. The Ombudsman can require the supplier to produce the billing data needed to verify the claim. Where the supplier's own records confirm the error, the Ombudsman can direct a full refund with or without additional compensation depending on the circumstances.
Financial awards from the Ombudsman are capped. For disputes where the overpayment exceeds the award cap, the Ombudsman process may still provide value in establishing the fact of the error and directing a correction, even if the total financial award is limited. Businesses with overpayment claims significantly above the Ombudsman's cap should take legal advice on whether a County Court or High Court claim is appropriate.
Documenting Mis-Billing Evidence Effectively
The strength of a mis-billing recovery claim depends on the quality of the evidence assembled. Businesses should maintain a contemporaneous record of actual meter readings throughout their occupation, ideally with dated photographs of the meter display. These provide an independent basis against which the supplier's read records can be checked.
Retaining signed contract documentation, including the tariff schedule and unit rate confirmation, is essential for demonstrating that the wrong rate was applied. Where the contract was arranged through a broker, the broker's written confirmation of the agreed rate is additional evidence. Published tariff schedules from the supplier for the relevant period may be obtainable through a subject access request or formal complaint disclosure.
Bank statements showing the amounts actually debited for each billing period, cross-referenced against the invoices on the account, establish the total amount paid. The difference between total paid and total correctly owed, calculated on the basis of actual reads and contracted rates, is the overpayment figure.
Frequently asked questions
Editorial disclaimer: The following questions address common points of uncertainty about recovering overpayments from mis-billing by business energy suppliers. They do not constitute legal advice. Businesses with significant overpayment claims should seek independent legal advice on the appropriate recovery route.
What is the difference between mis-billing and back-billing?
Mis-billing is overcharging by the supplier, whether through incorrect reads, wrong tariff, or administrative error. The customer has paid more than was owed. Back-billing is the reverse: the supplier under-billed in the past and then raises a correction to recover the shortfall. Ofgem's back-billing rules protect microbusinesses against large historic corrections. Mis-billing is governed by SLC 21B and general contractual overpayment principles, with a six-year limitation period for recovery in England and Wales.
Can I request a full billing audit from my supplier?
Yes. A business that suspects mis-billing has the right to request a full account audit in writing from its supplier. The request should specify the period under review and the specific data sought, including meter reads, unit rates applied, and all invoices for the period. Suppliers are required under their Ofgem licence conditions to maintain accurate billing records and to provide customers with the information needed to verify billing accuracy.
Am I entitled to interest on overpaid energy bills?
Where a supplier has retained overpaid amounts for a period, interest may be recoverable depending on the contract terms and the applicable legal principles. Ofgem's licence conditions require suppliers to refund overpayments and SLC 21B addresses billing accuracy obligations. General contract law principles regarding money had and received support an interest claim in cases of significant or prolonged mis-billing. The specific entitlement to interest should be raised in the formal complaint and, if not agreed, can be argued in an Ombudsman referral or court claim.
How far back can I claim for mis-billing?
In England and Wales, the Limitation Act 1980 provides a six-year limitation period for contractual claims. Overpayments made in the six years immediately before the date of the formal claim are recoverable in principle. Older overpayments fall outside the primary limitation period. In Scotland, the Prescription and Limitation (Scotland) Act 1973 applies a five-year prescriptive period. Businesses discovering a long-running billing error should raise a formal claim promptly to preserve the full six-year window.
What if the Energy Ombudsman's financial award cap does not cover my full overpayment?
The Ombudsman's financial award is subject to a cap. For businesses whose overpayment exceeds this cap, the Ombudsman process may still be valuable in establishing the fact of the error and directing a correction, but may not cover the full recovery. Businesses with large overpayment claims should take legal advice on whether a County Court or High Court claim alongside or instead of the Ombudsman route is appropriate given the amounts involved.
How we verified this
This article draws on Ofgem's published Standard Licence Conditions including SLC 21B, the Limitation Act 1980 as published on legislation.gov.uk, the Energy Ombudsman's published procedural guidance on billing disputes, and Citizens Advice guidance on energy billing disputes. The Prescription and Limitation (Scotland) Act 1973 is referenced for Scottish businesses and is published on legislation.gov.uk.
Sources
- Ofgem - Standard Licence Conditions including SLC 21B
- Limitation Act 1980 - legislation.gov.uk
- Energy Ombudsman - Billing dispute guidance
- Citizens Advice - Challenging an energy bill
For related reading on billing disputes and complaints, see Business Energy Complaint Process UK and Business Energy Direct Debit Rules UK.
