Switching business energy suppliers doesn’t have to be a painstaking process. The benefits of switching can include improved customer support, a better tariff, and technology that will help reduce your bills. Also, the law prevents suppliers from locking businesses into auto-rollover contracts or using no-exit clauses. These new laws make switching easier for businesses.
Variable-rate tariffs offer flexibility
Variable-rate business electricity tariffs are an excellent option for businesses seeking flexibility and cost-effectiveness. These tariffs offer more flexibility than fixed-rate contracts because they fluctuate according to market prices. This flexibility allows for budgeting and predictability. Additionally, variable-rate plans do not have exit fees, meaning you can change suppliers without penalty.
However, businesses must be aware that these tariffs are more expensive than typical business energy contracts. They are also more difficult to exit than other types of contracts. In addition, these contracts are often tied to a minimum contract duration of 12 months, which is not suitable for micro businesses.
The benefits of variable-rate plans are numerous. First, the prices change on a daily basis. They depend on many factors, including weather, fuel prices, distribution systems, and the market. In other words, the rates can change at any time. As a result, variable-rate plans offer flexibility, but lack reliability.
VAT eligible tariffs
VAT is a tax that is added to the cost of business energy bills. The standard rate is 20%, but businesses can also benefit from a VAT-discounted rate of 5%. To qualify for the discount, you should contact your energy provider and ask if you qualify.
Businesses that qualify for a VAT-discounted rate of 5% should fill out a VAT declaration certificate with their energy supplier. This certificate is different for each supplier, but there are some common requirements. For example, the amount of energy used by a business must be below a ‘de minimis’ level.
The Government has recently introduced a new tax on business energy bills, known as the Climate Change Levy (CCL). Businesses that purchase green energy sources are required to pay the CCL. Green energy suppliers charge a set amount per kilowatt-hour (kWh) to cover this tax. This rate changes annually on 1 April, and is clearly stated on the bill.
Businesses can save money on their energy bills by switching their supplier. Businesses should be aware of their switching window and the terms and conditions of their contracts before they make the switch. The process will allow you to avoid a potentially expensive “out-of-contract” rate. However, it is not completely risk-free. If you do not follow the switching process carefully, it may lead to increased overheads and overcharging.
To make the switching process as simple as possible, you should choose a supplier who has a dedicated account manager. This person will liaise with both your current and new supplier to ensure that you can switch with minimum disruption. They will also be able to negotiate on your behalf and ensure that you are on the best possible rates.
It is important to check whether there is a cooling-off period if you are on a contract. This means that if you find the wrong deal, you can cancel it within a specific number of days. In most cases, this period can be no longer than 21 days. However, some energy suppliers may take longer than this.