Most business energy bills are designed to be paid, not understood. There are usually only about eight numbers that matter, and two of them decide almost everything you pay. Here is what each line is, which ones you can change, and the threshold that quietly decides whether you pay two taxes or none.
The 30-second version
- Unit rate and standing charge are the two numbers that decide your bill. Everything else is small or fixed.
- The standing charge is daily and unavoidable, so it is charged even when the building is empty.
- Climate Change Levy is a tax per kWh, currently 0.801p for both gas and electricity.
- Below a usage threshold you pay no CCL and only 5% VAT, even as a business. Most small sites do not know this.
- Electricity in Great Britain is temporarily at 0% VAT for qualifying supplies, until 31 March 2027.
- Check the meter reading basis first. An estimated bill is the single most common reason a bill looks wrong.
On this page
The numbers that identify your supply
Before any of the money, find these. You will need them for every quote, query or move.
- MPAN (electricity). A long number, often shown in a grid and sometimes called a supply number or S number. It identifies the meter point, not the meter.
- MPRN (gas). The gas equivalent, usually a shorter number.
- Meter serial number. The meter itself, which can be swapped without the MPAN or MPRN changing.
Keep these somewhere other than the bill. If you ever dispute a bill, change supplier or move premises, the first question anybody asks is the MPAN or MPRN.
The two numbers that actually matter
Almost every pound on the bill comes from these two.
| Line | What it is | Can you change it? |
|---|---|---|
| Unit rate | Pence per kWh of what you actually use. Usually the largest single figure on the bill. | Yes, by contract. This is what is negotiated. |
| Standing charge | A fixed daily charge for being connected, whether you use anything or not. | Partly. It varies by supplier and contract. |
The standing charge catches people out more than anything else. It is charged per day, per meter, regardless of consumption, which is why a site that is closed for a month still gets a bill. If you have meters at premises you no longer use, you are paying a standing charge on each of them until the supply is formally ended.
Comparing quotes properly. A low unit rate with a high standing charge can easily cost more than the reverse. Work out the annual total: (annual kWh x unit rate) + (365 x daily standing charge). Comparing unit rates alone is how businesses pick the worse deal while believing they saved.
Climate Change Levy
CCL is a government tax on business energy use, charged per kWh and shown as its own line. From 1 April 2026 the main rate is 0.801p per kWh for both electricity and gas. Gas and electricity were brought into line with each other after several years of rebalancing, so a kWh of either now carries the same levy.
Two things reduce or remove it:
- A Climate Change Agreement. Energy intensive businesses in qualifying sectors that sign a CCA and meet its targets get a large discount: 92% on electricity and 89% on gas. Reduced rates run until 31 March 2027.
- Low usage. Below the thresholds in the next section, your supply is treated as domestic and no CCL applies at all.
VAT, and the threshold worth knowing
Business energy is normally standard rated at 20%. But HMRC treats small quantities of fuel and power as being for domestic use even when the customer is a business, and those supplies get the 5% reduced rate instead.
| Fuel | At or below this average | Also expressed as |
|---|---|---|
| Electricity | 33 kWh per day | 1,000 kWh per month |
| Gas | 145 kWh per day | 4,397 kWh per month |
The test is an average across the billing period, worked out per premises per customer, and it applies whether the bill is based on a reading or an estimate.
Here is the part most small businesses miss: the same thresholds do double duty. Fall below them and the supply is treated as domestic, which means the reduced VAT rate and no Climate Change Levy. A small shop, salon, office or workshop can easily sit under 33 kWh of electricity a day and be paying 20% VAT plus CCL because nobody ever checked.
Electricity is temporarily at 0% in Great Britain. From 1 October 2026 to 31 March 2027, qualifying electricity supplies in Great Britain are zero rated rather than 5%. Qualifying means supplied for domestic use, which includes those de minimis supplies above, or for a charity's non-business use. Gas is not affected and stays at 5%, and Northern Ireland stays at 5% for electricity. If you think you qualify and your bill still shows 5% or 20%, that is worth a call to your supplier.
If you believe you qualify and are not getting it, suppliers usually need a VAT declaration certificate from you. It is not automatic, and it is not always applied retrospectively, so it is worth sorting sooner rather than later.
Capacity and half-hourly charges
Larger electricity supplies are metered half-hourly, and their bills carry lines smaller sites never see.
- Available capacity, charged in kVA. You are paying for the capacity reserved for your site, not what you used. If your business has changed since the capacity was set, you may be paying for headroom you no longer need.
- Excess capacity charges if you exceed the agreed kVA, usually at a penalty rate.
- Reactive power, a charge related to how efficiently your site draws power. Often fixable with equipment rather than a contract.
- Pass-through charges such as distribution and transmission costs, which the supplier passes on rather than sets.
Pass-through charges are worth understanding when you compare contracts. A fully fixed contract rolls these into your unit rate. A pass-through contract shows them separately and they can move during your term, so a headline rate on one basis is not comparable with the other.
What to check every time
- Is it an actual reading or an estimate? Bills usually mark this with a letter such as A for actual and E for estimated. An estimate is the most common reason a bill looks wrong, and it is the easiest to fix: submit a reading.
- Does the consumption make sense? Compare with the same period last year, not last month. Energy use is seasonal.
- Are you in contract, out of contract, or on deemed rates? This changes your unit rate more than anything else on the page. Our guide to deemed and out of contract rates explains the difference and what each one costs.
- What is the VAT rate, and should it be lower? Check your daily average against the thresholds above.
- Is CCL being charged when it should not be? Same thresholds.
- Are you paying a standing charge on a meter you no longer use? Check every premises you hold, including ones you have left.
- When does the contract end? Diarise it with three months to spare, not three weeks.
Send us a bill and we will mark it up
We will tell you what each line is, whether your VAT and CCL treatment looks right for your usage, what you are paying that you need not, and what the same supply would cost on a negotiated contract. No obligation, and we will say so if you are already on a good rate.