Quick Summary

Landing on a deemed gas contract can feel like you have missed a step, especially when you have just moved into a new premises. This page explains what a deemed gas contract is, how a business ends up on one, why deemed rates are usually the most expensive prices a supplier offers, and the practical steps to exit.

A deemed gas contract is the default contract a business is put on when it takes over a premises and starts using gas without agreeing a new contract with the existing supplier. The supplier keeps the supply running and bills the business on its deemed rates until the business agrees a new contract or switches supplier.

deemed-gas-contract

Contents

  1. What a deemed gas contract is
  2. How a business ends up on deemed rates
  3. Why deemed rates are usually the most expensive
  4. How to exit a deemed gas contract
  5. FAQ

What a deemed gas contract is

A deemed gas contract is what sits in the background when a business takes responsibility for a premises and uses gas before agreeing a new contract.

It normally links to the existing supplier at that address. The supplier keeps the gas flowing, then bills you on its deemed rates and deemed terms until you either agree a new deal or switch away.

If you want the wider context on why there is always a supplier connected to a meter, our business gas guide explains the basics in plain English at business gas.

**Pro Tip**If your bill includes wording like deemed, deemed contract, deemed rates, or standard variable, treat it as a prompt to check your contract status. Those labels often show up when there is no negotiated fixed agreement in place.

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How a business ends up on deemed rates

Most businesses do not choose a deemed contract. It happens because a premises change hands and the admin lags behind real life.

Common scenarios include

  • You move into a new property without signing a contract and the gas supply is already live. This is the classic change of tenancy situation.
  • You take over a unit with the keys, then deal with utilities later. The supplier still has to bill someone for usage from day one.
  • The previous occupier closes their account and you start trading before you have agreed terms with any supplier.

You might not even know who the current supplier is when you first move in. That does not stop the deemed contract from applying, because the supply is tied to the meter and premises.

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Why deemed rates are usually the most expensive

Deemed rates are usually the most expensive prices a business will see from a supplier.

A few practical reasons sit behind that

  • No commitment. A deemed contract is meant to be temporary. You can usually leave quickly, so the supplier prices for uncertainty.
  • More risk for the supplier. The supplier may not yet have full billing details or a payment history for the new occupier.
  • Less competitive pressure. Deemed pricing is not the product you negotiated. It is a default position until you choose a contract.

It can help to think of it like walking into a café at an airport. You get fed, but you are paying the highest menu prices because you have not shopped around.

Deemed rates often get mixed up with out-of-contract rates, because both can be pricey and both are supplier default pricing. The difference is timing. Deemed rates usually happen when you move into new premises without agreeing a deal. Out-of-contract rates usually happen when a negotiated contract ends and rolls onto default terms. If you want that comparison in more detail, read Out-of-Contract Gas Rates.

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How to exit a deemed gas contract

A deemed contract is designed as a holding position, not a long-term plan. In most cases, you can exit without waiting for a renewal window.

Work through this in order

  1. Take an opening meter reading on the day you move in. If you can, take a photo as well. This helps draw a clean line between the old occupier and you.
  2. Identify the current supplier. Your landlord, letting agent, or the previous occupier can often tell you. If not, you can use industry lookup services to find the supplier linked to the meter.
  3. Contact the supplier and complete the change of tenancy. Ask them to confirm the date they have put you on supply from and confirm you are on deemed rates.
  4. Choose how you want to leave the deemed rate. You can agree a new contract with that supplier or switch to another supplier.

Most businesses leave deemed rates by moving onto a fixed term agreement, because it gives clearer costs and terms. Our explainer on fixed rate contracts walks through how those deals normally work and what to check before you sign.

**Key takeaway**The fastest way off deemed rates is to get your tenancy details and meter reading correct, then agree a new business gas contract or start a switch. The longer you leave it, the longer you stay on the supplier’s most expensive default prices.

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FAQ

Is a deemed gas contract legally binding

Yes. A deemed contract can apply even if you did not sign anything, because you are using gas at the premises and the supplier must have terms for that supply.

How long does a deemed gas contract last

It lasts until you agree a new contract with the existing supplier or you complete a switch to a different supplier. It is meant to be temporary.

Can I switch supplier while on deemed rates

Usually yes. Deemed arrangements are typically flexible, so businesses can normally start a switch without waiting for a fixed end date.

How do I know if I am on a deemed contract

Your bill often includes wording such as deemed, deemed rates, or standard variable. If you have recently moved premises and have not signed a contract yet, that is another strong clue.

What should I do on day one at a new premises

Take a meter reading, record the move in date, and find out who supplies the site. Then arrange a new contract as soon as practical so you are not left on deemed pricing longer than needed.

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