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Last updated October 2026.
The twelve-month rule
Since 2018, energy suppliers’ licence conditions have prevented them from billing microbusiness customers for energy used more than twelve months before the bill, where the customer was not at fault for the delay. Domestic customers have the same protection. The rule exists because of catch-up bills: a site on estimated reads for three years gets an actual read, and the supplier issues an invoice for the difference covering the whole period, which can be ruinous for a small business.
Under the rule, the supplier can only recover the most recent twelve months of that difference. The rest is written off. The customer still has to pay for energy used within the last year, and the protection does not apply if the customer caused the problem, for example by refusing access to the meter or ignoring requests for reads.
Who is protected
The licence protection applies to microbusinesses: fewer than ten employees and annual turnover or balance sheet below two million euros, or electricity consumption below 100,000 kWh a year, or gas consumption below 293,000 kWh a year. Most small businesses, shops, cafés, small offices and village halls qualify on at least one limb.
Larger businesses are not covered by the licence condition and rely on their contract terms, which often include a billing dispute period, and on general contract law, where the limitation period for recovering debts is six years. In practice many suppliers apply a similar twelve-month approach to larger customers as a matter of policy, but it is not a right.
| Customer | Protection | Basis |
|---|---|---|
| Microbusiness | Cannot be billed for energy used more than 12 months ago where the delay was the supplier’s fault | Supply licence conditions |
| Larger business | Depends on contract terms; six-year limitation period applies in principle | Contract and general law |
| Any customer at fault | No protection for the period of the customer’s own obstruction or failure | Licence conditions and contract |
Talk it through with us
Send us a recent bill or a quick description of your sites and we will tell you plainly what applies to you and what it would involve. No obligation.
What it means for overcharges
The rule is written about under-billing, but it shapes over-billing too. Suppliers tend to treat twelve months as the default window for correcting their own errors in either direction, and will often resist rebilling further back without a clear contractual basis. For microbusinesses the Energy Ombudsman can direct refunds of overcharges going back further where the supplier was at fault, but the process takes time.
The practical lesson for anyone validating invoices is simple: the clock is running. An overcharge found within a year is recoverable almost without argument. One found after three years is a negotiation. Continuous validation is cheaper than occasional validation for exactly this reason. The refund claims page sets out the process.
Frequently asked questions
Can an energy supplier back-bill my business for three years?
Not if you are a microbusiness and the delay was the supplier’s fault; the licence limits recovery to twelve months. Larger businesses depend on their contract terms.
What counts as a microbusiness for back-billing?
Fewer than ten employees and turnover or balance sheet under two million euros, or electricity use under 100,000 kWh a year, or gas use under 293,000 kWh a year.
Does the back-billing rule apply if I never submitted meter reads?
It may not. If the supplier asked for reads or access and you did not provide them, the delay can be treated as your fault and the protection does not apply for that period.
Does the twelve-month rule apply to refunds?
Not formally, but suppliers tend to apply a twelve-month default to correcting their own errors in either direction. Older overcharges can still be pursued through the dispute process and, for microbusinesses, the Ombudsman.
What should I do if I receive a large catch-up bill?
Check the period it covers and whether you qualify as a microbusiness. If the bill covers more than twelve months and the delay was not your fault, dispute the older portion in writing citing the back-billing rule.
Can Clearsight Energy help with a back-billing dispute?
Yes. We check the bill against the rule and your meter history, and handle the dispute with the supplier.
Your questions on this, answered in order
The questions businesses actually ask about this topic, in the order they tend to ask them. Each answer leads to the next; where we can help, there is a link.
My business electricity supplier has sent a huge catch-up bill, do I have to pay it?
If you’re a microbusiness, suppliers generally can’t bill you for electricity used more than 12 months ago where they’re at fault, such as not taking reads. The rule doesn’t apply if you’ve blocked access or behaved obstructively. Larger businesses depend on contract terms. Check the bill against meter readings and raise any dispute with the supplier promptly.
How do I take a business energy complaint to the Energy Ombudsman?
Complain to your supplier first. If it’s unresolved after eight weeks, or they issue a deadlock letter, you can take it to the Energy Ombudsman. Since December 2024, small businesses (fewer than 50 employees and turnover up to £6.5 million, or usage up to 200,000 kWh of electricity or 500,000 kWh of gas) have also had access to the Energy Ombudsman and formal complaints standards, though the 12-month back-billing rule itself still applies only to microbusinesses. There is no charge to businesses for using the service.
What can the Energy Ombudsman do for my business?
The Ombudsman can require a supplier to apologise, explain, correct bills, take action and pay a financial award. Both sides have 14 days to provide evidence after a case is registered, and suppliers have 28 days to carry out a remedy you accept. It can’t review a supplier’s commercial decisions, such as the prices it sets.
How can I stop billing problems happening again?
Submit regular meter readings, ideally monthly, and keep dated photos. A smart or advanced meter reduces estimates. Review each bill against your contract rates and usage, and check bills carefully after any change, such as a renewal, meter exchange or move. Periodic bill validation catches errors that are easy to miss in day-to-day running.
Can someone check my business electricity bill for errors?
Clearsight Energy offers bill validation, which compares your invoices against your contract rates, meter reads, standing and capacity charges, VAT and CCL treatment. Common findings include estimated reads, wrong VAT rates and charges carried over after a move. Send us recent bills and the contract and we’ll explain what we find and what can be raised with the supplier. Get in touch →
What evidence helps in a back-billing dispute?
Keep every bill or the gaps where none arrived, meter readings and photos with dates, records of contact with the supplier, and any letters about estimates or access. Proof that you gave readings or chased bills supports a case that the delay wasn’t your fault. For microbusinesses, that’s central to the 12-month back-billing protection.
How long does a business energy back-billing dispute take?
A supplier has eight weeks to resolve a complaint before eligible small businesses can go to the Energy Ombudsman, unless a deadlock letter is issued sooner. The Ombudsman then reviews evidence from both sides, which can take further weeks or months. Ask the supplier to put collection on hold while the dispute is open.
Can someone help prepare my back-billing dispute?
Clearsight Energy can review the catch-up bill against your reads, contract and the back-billing rules, then help you set out the complaint clearly. We’ll explain what’s realistic before you start and our fee basis. Send the bill, your readings and any correspondence. Get in touch →
Why have I been sent an estimated bill?
Estimated bills happen when a supplier doesn’t receive an actual reading, often because a smart meter isn’t communicating or access hasn’t been arranged. Over time, estimates can drift from real usage and lead to a catch-up bill. Send a dated reading and photo to your supplier, and ask them to rebill from actual reads.
My smart meter isn’t sending readings, what should I do?
Report it to your supplier, who’s responsible for the meter. Meanwhile, submit manual readings regularly so your bills reflect actual usage. Some older smart meters lose functionality after a switch, and the supplier may need to update or replace them. Keep a record of the date you reported the fault in case a dispute follows.
Can someone check my business electricity bill for errors?
Clearsight Energy offers bill validation, which compares your invoices against your contract rates, meter reads, standing and capacity charges, VAT and CCL treatment. Common findings include estimated reads, wrong VAT rates and charges carried over after a move. Send us recent bills and the contract and we’ll explain what we find and what can be raised with the supplier. Get in touch →
Can I pay a large business energy bill in instalments?
Many suppliers will agree a payment plan if you contact them early and explain what you can afford. Check the bill is accurate first, especially if it covers a long period or follows estimates. Citizens Advice offers help at no charge to small businesses with energy debt, and keeping communication in writing helps if things escalate.
Can someone check my business electricity bill for errors?
Clearsight Energy offers bill validation, which compares your invoices against your contract rates, meter reads, standing and capacity charges, VAT and CCL treatment. Common findings include estimated reads, wrong VAT rates and charges carried over after a move. Send us recent bills and the contract and we’ll explain what we find and what can be raised with the supplier. Get in touch →
Need help? Get in touch
Call us on 020 8036 5715, or email us, and we will take it from there.