Common business energy billing errors and how to spot them

1. Old rates after a contract change

The most common error we find, and the easiest to miss, is a bill that carries on at the old unit rate or standing charge after a new contract has started. It happens on renewals as well as switches: the supplier’s billing system was not updated when the new agreement was loaded, and the first invoice of the new term looks like the last invoice of the old one. Because the numbers are familiar, nobody questions them.

Spot it by putting the contract rate schedule next to the first two invoices of any new term. If a rate differs by even a fraction of a penny, raise it. Suppliers correct these readily once pointed out, and the credit should cover every day since the correct start date.

2. Estimated reads

An E against the read on your bill means the supplier guessed. One or two estimated reads are normal; a year of them is a problem, because the catch-up bill when an actual read finally arrives can be large, and because estimated consumption is what your next renewal quote will be based on. Businesses with seasonal usage are hit hardest: a summer estimate based on winter usage overcharges for months.

Spot it from the read type column. Fix it by submitting actual reads, pushing for a smart or automated meter where the site qualifies, and asking for a rebill from the last actual read where the estimates have drifted. Our back-billing rules page explains the limits on what a supplier can recover after a long run of estimates.

3. Wrong meter class or agreed capacity

The standing charge on electricity is driven by the meter class, and larger sites also pay a monthly capacity charge based on the agreed supply capacity in kVA. Both are frequently wrong for the business actually occupying the site, because they were set for a previous tenant or an earlier use. A small office in a unit built for a workshop pays a workshop’s fixed charges every month.

Spot it by comparing the standing charge against the supplier’s published charges for each meter class, and the agreed capacity against the maximum demand figure on a half-hourly bill. Fix it by requesting a meter class review or a capacity reduction through the supplier; both are routine and the saving is permanent.

4. VAT at the wrong rate

Business energy carries VAT at 20 percent, but sites with very low usage, and charities for their non-business activity, qualify for 5 percent. The reduced rate is only applied when a VAT declaration is on file with the supplier, and declarations are lost on every switch and most renewals. Small sites, village halls, community organisations and seasonal businesses overpay for years as a result.

Spot it from the VAT line and your knowledge of the site. Fix it by filing a declaration, and ask for a rebill back to when eligibility began. The VAT and CCL errors page has the thresholds and the paperwork.

5. Climate Change Levy charged in error

The Climate Change Levy is a per-kWh tax on business energy, and it follows VAT: sites paying 5 percent VAT are exempt from it, and organisations under a Climate Change Agreement or using energy in exempt processes pay a reduced rate. Like VAT, it depends on paperwork the supplier holds, and like VAT the paperwork gets lost. Rate changes each April are also occasionally applied late or not at all.

Spot it from the CCL line against your VAT status and any relief certificates. Fix it with the supplier, with a rebill back to the start of eligibility.

6. Out-of-contract and deemed rates

If a fixed term ends without a new contract, or you move into premises without agreeing one, the supplier bills at its out-of-contract or deemed rates, which can run 50 percent or more above a negotiated price. The invoice usually says so in small print. This is not strictly an error, but it is the single most expensive thing on this list and it is corrected the same way: by noticing and acting.

Spot it by the absence of a contract reference and a unit rate well above anything in the market. Fix it by agreeing a new contract immediately; the out-of-contract rates guide explains the mechanics for both fuels.

7. Duplicate and misallocated charges

Sites change hands, meters are swapped, businesses merge, and billing systems do not always keep up. The result is periods billed twice, charges for a meter that was removed, or a neighbour’s supply appearing on your account. These are rare but large, and they are found by checking that every meter on every invoice is yours and every period is billed once.

Spot it by reconciling meter serials and MPANs or MPRNs on the bill against your site list. Fix it through the supplier’s dispute process with evidence of the meter change or move.

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