Small business energy comparison

Are you a micro or small business?

Ofgem uses two definitions. Which one applies affects the protections you get from your supplier and where you can go if a complaint is not resolved.

These definitions come from Ofgem's guidance on getting a business energy contract. Ofgem adds that some suppliers may use either your business size or your annual energy consumption when deciding which contract or protections apply. If you are not sure which applies, tell us your employee numbers and annual consumption and we can explain how suppliers are likely to treat you.

Extra protections for microbusinesses

Ofgem requires suppliers to give microbusinesses more than the basics. Your supplier must:

• Give you clear information about your contract
• Give you information about renewal prices before your contract ends
• Limit termination notice periods to 30 days (evergreen contracts only)
• Acknowledge a request to end a contract within 5 working days (evergreen contracts only)

Since 1 October 2022 suppliers have also had to show broker costs in the principal terms of microbusiness contracts, and they cannot require a microbusiness to give notice of intent to switch except on evergreen contracts. Ofgem's back-billing rule also covers microbusinesses: you do not have to pay for energy used more than 12 months ago that was not accurately billed, unless you acted unreasonably.

Our microbusiness energy rules page covers each protection in more detail.

Protections that apply beyond microbusinesses

• Standards of Conduct: since 1 July 2024 Ofgem's Standards of Conduct, which require suppliers to treat customers fairly, have covered business customers of all sizes
• Broker costs shown: for contracts signed since 1 October 2024, suppliers must show broker fees in the principal terms for all non-domestic customers, and provide the information on request
• Brokers in a redress scheme: Ofgem says a broker paid by an energy supplier must be a member of an approved redress scheme (the supplier rule started with microbusiness contracts on 1 December 2022). Fidelity Energy Ltd is listed on the Energy Ombudsman's broker register; see energy broker ombudsman and complaints
• No cooling-off period: this cuts the other way. Once you agree a business energy contract it is binding; see the business energy cooling off period page

Common pitfalls for small businesses

Most problems small businesses run into with energy are about timing and defaults rather than the headline price:

• Rolling over without comparing: if you do nothing at the end of a fixed term, some contracts renew automatically for a further fixed term (Ofgem says usually 12 months), which may be on a higher rate. Microbusinesses get renewal price information first: use it to compare. See business energy contract renewal
• Deemed rates after moving in: if you start using energy at new premises without a contract, you will be on a deemed contract, which Ofgem says is usually more expensive. See deemed rates and change of tenancy
• Out-of-contract rates: some suppliers apply these when a fixed term ends without a new agreement; you can usually switch away at any time. See out-of-contract rates
• Early exit: Ofgem says most suppliers will not let you switch before the end of a fixed contract unless you have agreed a termination clause or pay an exit fee. See how to get out of a business energy contract
• Judging only the unit rate: for low users the standing charge can matter as much. See how to find the cheapest business energy contract
• Not checking the commission: it is in your principal terms. See energy broker fees

How small business energy comparison works here

1. Send us your bills. A recent bill for each supply and your current contract end date. Our business energy quotes page lists everything that helps.
2. Fidelity Energy prices your supplies. Forever Communications works as an agent of Fidelity Energy, which compares a panel of 24+ suppliers (its own figure).
3. We go through the options with you. Total cost on your own consumption, contract length, exit terms, green options and the commission included.
4. You choose and the supplier confirms. The supplier runs its own checks and, once it accepts, the new supplier starts the switch. Your energy still comes through the same wires, pipes and meters.

The steps for moving supplier are set out in full in how to switch business energy supplier.

Using a broker as a small business

Ofgem says a broker can help you find a suitable contract and negotiate with your chosen supplier, which can save you time. Its advice is to check which suppliers a comparison service includes and whether it compares the whole market or a selection, whether it receives commission, and which approved redress scheme a broker paid by suppliers belongs to. Here is how that applies to us:

• Who prices the quotes: Forever Communications works as an agent of Fidelity Energy, which describes itself as an independent energy consultancy and broker. Fidelity Energy prices your supplies across its panel and arranges the contract
• How wide the comparison is: Fidelity Energy says it compares 24+ suppliers. That is a panel, not every supplier in the market
• How it is paid: commission from the supplier, included in your unit rate and/or standing charge, unless you choose to pay a fee by invoice instead. Forever Communications receives a share. The amount is shown in your principal terms
• Redress: Fidelity Energy Ltd is listed as an active member on the Energy Ombudsman's broker register (since 1 December 2022)

More on how brokers work is on our what is an energy broker page.

VAT, CCL and small users

Small businesses often ask whether they pay the full rate of VAT and the Climate Change Levy. In short:

• Business use is normally charged VAT at the standard rate, but supplies under HMRC's de minimis limits count as qualifying use and get the reduced rate (electricity up to 33 kWh a day or 1,000 kWh a month; gas up to 145 kWh a day or 4,397 kWh a month, for one customer at one premises)
• From 1 October 2026 to 30 June 2027, qualifying supplies of electricity in Great Britain are temporarily zero-rated for VAT; Northern Ireland stays at the reduced rate and gas is not included
• GOV.UK says the main rates of the Climate Change Levy are not paid on certain supplies, for example to a business that uses small amounts of energy

The detail is on our VAT and Climate Change Levy page, with links to GOV.UK.

Sector guides

Small businesses in some sectors have extra points to think about: charities and VAT, pubs and restaurants with long opening hours and living accommodation, and farms with several supplies and a farmhouse. See business energy by sector, including energy for charities, hospitality and farms.

Contact us with your bills and contract end date when you are ready to compare.