One of the things you’ll be wondering is if these contracts have cooling-off periods. Well, you’ve come to the right place. Business Energy Comparison will tell you everything you need to know about cooling-off periods for business energy contracts.
Cooling Off Period For Business Energy Contracts
Finding the perfect business energy contract can be tricky. There are lots of different deals out there, and it’s hard to know which is the right one for you. If you have a new business, you might not have even dealt with a business energy supplier before.
Business energy contracts work differently to domestic ones. So, it’s very important that you know exactly how they work.
Is There A Cooling-Off Period For Business Energy Contracts?
A mandatory cooling-off period was introduced in 2014 by Ofgem. This allows domestic consumers in the UK a 14-day period to decide if their new energy supplier is right for them. This makes it less likely that domestic consumers will end up getting stuck with a bad energy deal.
However, the same rule doesn’t apply to business energy contracts. There is no mandatory cooling-off period once a business has signed a contract. The cooling-off period is at the discretion of the business energy supplier.
So, some business energy suppliers will include one in the contract. Unfortunately, the majority of them don’t. The best way to find a deal with a cooling-off period is to compare business energy suppliers. That way, you can compare energy deals and find the one that’s right for you.
Getting The Right Business Energy Contract
Due to the fact your business might have a contract with no cooling-off period, choosing the right contract is vital. Once you’ve signed a new contract for your business electricity and business gas prices, there might be no turning back.
There are several important things that you should always consider before you sign a business electricity and gas contract. The considerations will vary depending on the size and specific needs of your business. Still, there are a few key points that all business owners should bear in mind:
- Fixed rates: If your business energy supplier gives you fixed rates, then you’ll pay a set rate each month. You pay an agreed-upon fee per kWh. This protects you from fluctuations in the energy market. However, your energy costs will vary based on your energy usage.
- Variable rates: If your contract has variable rates, then the amount you pay for your energy supply will vary. The price of your business gas and electricity will depend on market prices. This is a disadvantage when the price goes up and an advantage when they’re lower.
- Length of notice period: You should consider how much notice period is required if you want to find a new supplier. This is the amount of notice that you have to give before ending your current contract.
- Contract length: You need to find out what the contract end date would be and decide if the length of the contract is right for your business. Some businesses are better suited to long contracts and some to shorter ones. You can use growth plans and usage forecasts to work out which length is best for you.
- Business energy suppliers buy enough gas and electricity in bulk to fulfil your whole contract period. So, if you decide you want a new supplier, it’s hard and expensive to get out of your contract early.
Cooling-off period: Although it’s not mandatory, some business suppliers do offer cooling-off periods. You need to decide if having a cooling-off period is essential for your business. If you’re really happy with the proposed contract, then it might not be needed.
Is Cancelling A Business Energy Contract The Same As Cancelling A Domestic Energy Contract?
Unfortunately, it’s not just the energy costs that go into your monthly energy bill. When browsing quotes and tariffs, there are other costs that you should pay particular attention to:
• Unit cost: this is the price you pay for each unit of electricity and gas your businesses uses (measured in kWh).
• Standing charge: this is a daily charge that covers the cost of transporting energy directly to your premises and the maintenance of the national grid.
• Business energy taxes: taxation makes up the remainder of your business energy bill. This includes VAT charged at a rate of 20% and the Climate Change Levy (CCL). The CCL is a mandatory government tax that most businesses pay on gas, electricity, and solid fuels in an effort to become more energy efficient.
To get the best deal on your business energy, then find quotes that have lower unit costs and standing charges. This will help you make significant savings on your gas and electricity bills.
Common Reasons For Cancelling A Business Energy Contract
Sometimes, it’s a good decision to cancel your business energy contract. Even though it can be difficult and costly, there are a few reasons it can be worth doing:
- Poor service: You may want to cancel your contract if you’ve received poor service from the supplier. They might have handled any issues badly or simply not responded when you informed them of problems.
- It may also be the case that your energy supply has been interrupted frequently. If this happens a lot, outside of essential maintenance, then this would be considered very poor service.
- To avoid this, make sure you compare business gas and electricity before choosing your deal. You should also read some reviews to see how other customers rate the service of the supplier.
- Reaching the end of your contract: If you’re coming to the end of your contract, you may want to cancel it so that it doesn’t roll over. You can then shop around for another supplier whilst you wait for the current deal to expire.
- Unsuitable tariff: You might have misjudged the needs of your business and chosen a tariff that isn’t suitable. This can mean that you’re paying too much for the energy you use. If this is the case, it’s best to cancel the deal and find a better one.
Unfortunately, energy contracts for businesses don’t usually include cooling-off periods. Yet, it is possible to find suppliers that do include them. If your contract doesn’t, then you need to be certain that you’ve found the best deal possible.
Otherwise, you may end up locked into a contract that isn’t suitable for your business. So, be sure to follow the tips in this guide, and early termination shouldn’t be needed.
Frequently Asked Questions
Do business energy contracts expire when businesses change premises?
If your business changes premises, then your current contract will end. However, you will still have to pay any charges that were accrued under that contract. Your contract will also end if your business ceases trading. Again, you would still owe the money for any charges accrued under the contract.
How long does it take to switch suppliers for businesses?
Once you’ve signed a contract, you can’t switch suppliers unless you cancel it or it comes to an end. You can begin the registration process with a new supplier 28 days before your current contract ends. Your new deal should then go live the day after your old contract ends.
How far in advance can my business arrange a contract with a supplier?
This is very flexible. You can essentially agree on a new contract at any time to begin at any time. Generally, suppliers allow businesses to agree on a contract 3 to 5 years before it begins.
Business Energy Comparison
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