| TL;DR: Business energy has no price cap, no dual-fuel tariff, no cooling-off period, longer contracts and fixed switching windows. It also carries 20% VAT and the Climate Change Levy. Last reviewed July 2026 |
| BUSINESS ENERGY : HOW IT DIFFERS |
Business energy differs from domestic energy in five main ways: there is no price cap, no dual-fuel tariff (gas and electricity are separate contracts), no 14-day cooling-off period once a contract is signed, contracts can run up to four years, and switching is only possible inside a renewal window rather than at any time.
KEY FACTS
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Pricing and the price cap
Domestic default tariffs are protected by the Ofgem price cap, which limits the unit rate and standing charge. Business energy has no equivalent, so a lapsed contract can move to expensive deemed rates with no ceiling.
Because there is no cap, timing the contract matters far more for a business than for a household.
Contract length and the missing cooling-off period
Domestic energy contracts carry a 14-day cooling-off period during which they can be cancelled without penalty. Business energy contracts do not: once signed, they are binding.
Business terms are also longer, commonly one to four years, so the decision to fix locks the rate for the whole period.
Dual fuel: available at home, not in business
Households can take gas and electricity on a single dual-fuel tariff. In the business market there is no dual-fuel discount: gas and electricity are always separate contracts.
A single supplier can still provide both, which keeps billing and points of contact simple, but the two supplies are contracted and priced independently.
Tax and levies
Business energy is charged at 20% VAT, against 5% for domestic supply. A reduced 5% rate applies to qualifying low users and to charities for non-business use.
Businesses also pay the Climate Change Levy on units used. From 1 April 2026 the main rate is 0.801p per kWh for both electricity and gas. Very low users below the de minimis threshold pay 5% VAT and no levy.
Metering and switching windows
Larger sites use half-hourly meters, which are mandatory where peak demand reaches 100 kW. Meter classification affects the tariffs a business can be offered.
Switching is only possible inside the renewal window, usually one to six months before the contract ends. Miss it, and the supply can roll onto deemed rates until a new contract starts.
| Note: VAT treatment and levy relief depend on how energy is used and on usage levels; confirm your position with HMRC or your supplier before assuming a reduced rate. |
| RELATED GUIDES |
| Disclaimer: Kael Tripton Ltd is an independent editorial publisher, ICO-registered (ZC135439). This guide is general information, not financial, legal or energy-broking advice, and carries no commission or referral arrangement. Rates and figures are correct as at the review date; verify current figures with the primary sources listed before acting. |
Frequently asked questions
Can a business get a dual-fuel tariff?
No. Gas and electricity are contracted separately, although the same supplier can provide both.
Does a business energy contract have a cooling-off period?
No. Once signed, a business energy contract is binding, unlike a domestic contract's 14-day cancellation right.
Why is business energy more expensive than domestic?
Business bills carry 20% VAT and the Climate Change Levy, and business rates are not shielded by the price cap.
When can a business switch supplier?
Only inside the renewal window, usually one to six months before the contract ends, unless it is on deemed or out-of-contract rates.
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