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Final bill

What is a final bill?

A final bill is the closing invoice a UK energy supplier issues when an account ends. Three situations trigger one: a Change of Tenancy when a business moves out, a switch to another supplier, or the closure of a business and disconnection of the supply. The final bill reconciles everything — energy used to the closing meter reading, standing charges to the closing date, CCL and VAT applied correctly, any credits owed, any debits outstanding — and produces a single number that closes the account. It sounds straightforward and it usually is. The complications arise where reads are estimated, where the closing date is disputed, or where the contract had a termination charge that the customer was not expecting.

A final bill closes out any utility account, whether that’s business electricity, business gas, business water, or any other business energy supply you’ve moved away from.

Final bills are the single point at which all the moving parts of an energy account come together. Done well, the account closes cleanly and both parties move on. Done poorly, the bill becomes a months-long dispute with backdated reads, the wrong VAT rate, missing direct debit credits, and termination fees the customer never agreed to.

What a final bill is

A final bill closes out an energy account. It covers the period from the last regular bill to the closing date and reconciles:

• All energy consumption up to the closing meter reading.
• Standing charges and any pass-through costs (CCL, network charges, capacity charges) to the closing date.
• VAT calculated on the final subtotal.
• Any direct debit balance carried into the closing period.
• Any early termination charges that apply to the contract.
• Any outstanding query credits or debits.

The result is a single net figure: either the customer owes the supplier (and pays the final bill) or the supplier owes the customer (and refunds the closing credit balance).

When a final bill is issued

Three normal triggers:

• Change of Tenancy. When the customer moves out of a premises and someone else takes over the supply. The supplier closes the outgoing account on the change date and bills up to that point.
• Switch to another supplier. When the customer switches supplier at the end (or before the end) of a contract. The old supplier closes the account on the switch date.
• Business closure or disconnection. When the business closes or the supply is physically disconnected. The supplier closes the account on the disconnection date.

The trigger determines how termination charges and notice periods are handled. Move-outs and switches at contract end are clean; early exits trigger termination fees; disconnections require the meter to be physically removed by the network operator before the account fully closes.

What appears on a final bill

A standard final bill itemises:

1. Opening reading. The reading on the last regular bill.
2. Closing reading. The reading on the closing date (actual where possible, estimated where not).
3. Consumption. Closing minus opening, in kWh.
4. Unit rate × consumption. The variable cost.
5. Standing charge × days. The fixed daily cost over the final period.
6. CCL. kWh × current CCL rate.
7. Other pass-through costs. Network charges, capacity charges, if applicable.
8. VAT. 5 per cent or 20 per cent applied to the subtotal.
9. Termination charges. If exiting before contract end.
10. Carry-over balance. Any direct debit credit or debit from the prior period.
11. Final amount. Net total to pay or to refund.

The closing meter reading

The closing meter reading is the single most important number on the final bill. It determines the consumption, the variable cost, and the CCL/VAT applied. Three sources are used in order of preference:

• Customer-provided actual reading on the closing date. Best evidence. Photograph the meter face on the day.
• Smart meter automatic reading. Reliable where the meter is communicating.
• Estimated reading by the supplier. Used where no actual is available. Estimates are often wrong, especially if consumption patterns have changed.

For a clean final bill, provide your own reading on the closing date and submit it within seven days. This pre-empts the supplier's estimate.

Termination charges and early exit

If the account closes before the contract end date, the supplier may apply a termination charge. The structure varies by contract:

• Fixed termination fee. A defined amount (e.g., £200 per meter).
• Volume-weighted termination. A charge calculated on the consumption remaining in the contract period.
• Buy-out fee. A charge equal to the supplier's loss against the prevailing wholesale price.

The termination clause is in the contract signed at the start. Customers exiting early should review their contract carefully before assuming the final bill termination charge is wrong. Customers exiting at contract end should not see a termination charge at all — if one appears, it is an error.

Direct debit credits and refunds

If the account has been on direct debit, the closing balance may be a credit owed back to the customer. UK suppliers must refund credit balances within a defined period (typically 30 days for domestic, varying for business contracts but with similar expectations).

To avoid delay, make sure the supplier has:

• Current bank account details for the refund.
• The customer's forwarding address for any correspondence.
• A primary contact for queries.

Common final bill errors

• Estimated closing read. The supplier estimates because the customer did not provide an actual. The estimate is wrong and consumption is over- or under-stated.
• Wrong closing date. The supplier uses a date later than the actual move-out or switch date, padding the bill with extra standing charges and consumption.
• Termination fee applied incorrectly. Either applied when it should not be (exiting at contract end), or calculated at a higher rate than the contract specifies.
• VAT rate wrong. The bill applies 20 per cent where 5 per cent qualifies, or vice versa for the closing period.
• Direct debit credit not applied. The carry-over balance from a credit position is omitted from the final calculation.
• Pre-COT consumption included. The final bill picks up energy used by the new occupier after the change date.

How to dispute a final bill

If the final bill is wrong, the process:

1. Raise a written query with the supplier within 14 days of receiving the bill, identifying the specific lines in dispute.
2. Provide evidence: meter photograph, lease or completion statement showing the change date, contract clause supporting your position.
3. The supplier investigates and either revises the bill or rejects the query with explanation.
4. If unresolved after eight weeks (or after a deadlock letter), micro-businesses can escalate to the Energy Ombudsman. Larger businesses use commercial dispute resolution under the contract.
5. Pay any undisputed portion of the bill while the disputed portion is being investigated, to avoid late payment charges on the parts not in dispute.

Related concepts: Change of Tenancy, bill validation, deemed rates, termination notice window.

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