Within this business energy comparison guide, we’ll take a look at what the consequences might be for a business or homeowner if they simply cannot put together the money to pay those energy bills; consider some of the government support options available; and how you can make sure that those business gas and electricity bills stay as low as they can.
What Happens If You Can't Pay Your Energy Bills?
Warm home discount
The warm home discount is a chance to qualify for a £150 reduction in energy bills during winter 2022/23. The warm home discount is available to customers on a low income, who have the same electricity supplier and gas supplier.
Alright, so the term warm home discount rather implies that the energy company would be less inclined to extend this discount to those struggling to pay their business energy bills. While this is generally the case, keep in mind that many small businesses and micro-businesses work from home.
If the company is a registered business with just one, or two employees, struggling with paying bills and bringing in little income, speak to your energy supplier about the possibility of qualifying for a warm home discount. After all, if you work or run a business from home, your workplace is still your home, right?
Pay what you can
If you are struggling to pay due to rising energy prices, most energy suppliers will appreciate a show of goodwill by simply paying what you can. No, they probably won’t let you off the hook, so to speak, but you will have a better chance of working out an affordable payment plan if you opt to pay something off the debt as soon as possible.
Even if your business is unable to pay the full cost right now, paying what you can is better than letting missed payments slip through. This will not stand you or your business in good stead with the energy company and it will ultimately lead to your own damaged credit rating.
Dealing with missed payments
When things go south, you can expect your energy supply company to seek out the money you owe them via a debt collection agency or a court warrant. Either way, they will ultimately seize back the money owed to them and it will negatively affect your credit rating and relationship with the supplier.
If you make no proactive move to work out a payment plan with your supplier, and they are forced to take out a court warrant, they are likely to temporarily sever your gas and electricity. In this instance, the cost of disconnection and possibly reconnection will be added to your existing energy bill.
When To Contact Your Energy Provider
As soon as you suspect you might not be able to pay your energy bills, contact your energy supplier. Energy suppliers are required to provide help and support, so provided you do not take advantage, they should be able to help you figure out a way to pay. The more upfront you are with your energy supplier, the more inclined they will be to go that extra mile to help you.
If you find that your current energy supplier is not giving the ideal debt advice, or is perhaps not offering the ideal help, a business might decide to switch energy suppliers. No, this will not cancel out any debt owed to the existing supplier, but the new supplier might offer a better rate, or be more willing to provide support.
Many domestic and business customers opt to pay energy bills via direct debit. This is often the cheapest way to pay for energy, so for any business struggling to pay it helps save money. It can be a little risky, however, if you are on the verge of being unable to pay your energy bill.
Think about it, if you are unable to pay and the direct debit automatically tries to deduct more money than you have, the payment is likely to fail and you may be charged. Alternatively, you might go overdrawn and end up paying overdraft charges on top of your energy cost.
If a business is unable to pay energy costs, it can result in the business being forced to close its doors for good. However, there is no reason to assume things will come to that so long as you take every step available to properly manage your business finances.
First of all, speak to your supplier. You might get all the support and advice you need, with a little extra time to sort things out. Being upfront will prevent your supplier from switching off your power at the end of the month and your provider will also be able to alter your direct debit payments to match what you can afford to pay right now.
If your supplier is unable, or unwilling to help, contact your local citizens’ advice bureau or a national debt advice service to discuss funding and other business energy support options.
Frequently Asked Questions
Ultimately, yes. If you fail to pay your electricity bill within 30 days without contacting your supplier, expect your electricity to be cut off.
Friendly credit ensures your electricity and gas will be kept on during the night, at weekends, and on bank holidays, when you might not be able to top up a meter or get in contact with your energy supplier.
Protection for both domestic and business energy, the energy price cap ensures that a supplier cannot charge your business more than a set amount for electricity or gas.
The price cap is a sort of energy price guarantee set out by the government to prevent energy suppliers from charging above a set amount for energy usage.
Business Energy Comparison
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