This is how much you pay per kilowatt-hour (kWh). Whenever you sign up for a new account or switch supplier, you will have the option of paying either a fixed rate deal or a variable rate. For a fixed rate tariff, how much each unit of gas (kWh) costs you will remain the same throughout the contract period. With a variable rate package, the price that you pay per kWh can go up or down, depending on fluctuations in the gas market.
This is what you pay the gas supplier for all of the peripherals involved with you getting your gas. None of the standing charges relates to the gas that you use. Instead, it is the price that you’re paying for meter readings, maintenance, distribution, and transportation.
It’s also worth noting that there are zero-standing charge tariffs. In most cases, these are for more seasonal businesses with more fluctuations in the cost of their unit rates. You should also be aware that businesses have to pay 20% VAT on gas and a fee for the Climate Change Levy (CCL). However, there are CCL discounts available, and some businesses may be exempt.
Although different gas suppliers will always have variations in the way that their gas bills look and where they put information, they should all have the following information:
- The contact details of the gas supplier.
- The bill issue date.
- The period that the bill covers.
- How much your last payment was, and the date that payment was made.
- Your business address and details, including your reference or account number.
- The total cost of the gas you’ve used in your business before the VAT is applied.
- The cost of your Business VAT (usually 20%, but some businesses are eligible for a lower rate VAT).
- The total amount that you have to pay.
These are the bare basics that every business gas bill will have. There is often some additional information that different suppliers will also include. Many will have the supplier’s gas supply number, and a meter point reference number (which will be useful information if you’re planning to change your gas supplier). Most will provide you with a very detailed breakdown of your gas use, with information like the last meter reading and the cubic feet (Cu FT) of gas you have used. There should also be some mention of whether the meter readings are actual or an estimation and how those readings were calculated. Finally, there may also be a payment slip included on the bill. This is only for those businesses that prefer to pay their gas bill by direct debit, bank transfer, or through the post.
How much your gas bill comes to will depend on the size of your business. A micro business will have a smaller bill than a large or industrial business, but the final cost will vary from supplier to supplier. On average, the following should be expected:
Business Type Average gas consumption Total Annual Bill
Micro Business 5,000kWh £1,518
Small Business 20,000kWh £3,664
Medium Business 35,000kWh £6,563
Large Business 90,000kWh £15,609
Industrial Business 250,000kWh £52,931
It’s important to realise that if your gas bill is around one of these averages, then there’s a very good chance that you’re paying too much. There are a lot of gas deals available at all times, so it’s always worth shopping around.
More people are starting a business from their own homes than ever. In some cases, it can be beneficial to switch from a domestic to a business gas tariff. There are protections in place if your home business is a microbusiness, such as a cooling-off period (not often available for larger businesses) and a shorter notice period.
There are lots of factors that affect the price that you pay for your business gas. From wholesale costs to network charges, the more that you understand what the information on your bill is telling you, the easier it is to find ways to pay less.