Small business gas suppliers and prices

The current energy crisis in the UK is causing a huge headache for small business owners, and, as winter edges ever closer, experts predict that many small businesses could struggle to pay their energy bills.

Unlike consumers, businesses aren’t as protected by the price cap safety net as individual households. And, as wholesale prices continue to climb – up already by 250% since the start of this year – business energy suppliers will have no choice but to hike up prices for customers in order to survive.

Understandably, as a small business owner you want to mitigate the risks of having to pay hand over fist for astronomical energy prices during the winter months. Your best option is to compare gas suppliers to ensure you are getting the best deal possible for your business, which is where our free cost comparison tool comes in.

By using our no obligation tool, you can compare personalised bespoke quotes directly from energy suppliers before making an informed decision based on the supplier’s cost, support, and contract lengths. In light of the current situation, business stability is yet another point of comparison. It’s a tough time for smaller suppliers – especially after CNG, which supplies roughly 46,000 small businesses, including 10-15 domestic energy suppliers, revealed that it will no longer be shipping gas to its domestic suppliers.

Also be sure to act quickly, as more then ten energy suppliers, including Avro Energy and most recently Pure Planet, have collapsed since September. The last thing you want as a business owner is to be transferred to a more expensive energy supplier on a new tariff by Ofgem.

Whether you’re looking to switch immediately, this article will provide you with key information about the cheapest energy suppliers currently available, including costs.

Business gas suppliers and prices: At a glance

*Lowest price available; price varies depending on region

Key considerations when comparing business gas suppliers

Here’s what you need to think about when choosing your business gas supplier:

Charges

There are two charges that will make up the majority of your business gas bill: the unit cost, and the standing charge.

• The unit cost: measured in kWh (kilowatt hours), this is what you’ll pay for the actual resources you use. This is usually a fixed rate, although bills can vary depending on how much energy you use.
• The standing charge: as both gas and electricity are brought to UK homes and businesses via the National Grid, a maintenance and service charge must be paid. This comes in the form of the standing charge – a fixed price that covers the cost of getting your gas to your door.

Despite the fact the standing charge goes towards the National Grid’s delivery of your energy, this is not a nationalised charge, and will vary from supplier to supplier. So, when looking to save money on your energy bills, be sure to take both the unit cost and the standing charge into consideration.

Your rate

Fixed rate – This will fix the price per unit of your gas, meaning your bill will not be affected by any price hikes in the market. However, although your price per unit will remain the same, your bill will still vary depending on your energy usage, which can vary month-on-month.

A fixed rate tariff is the most common option for businesses, due to the protection it provides against energy price fluctuations in the market. Wholesale prices of commercial gas can be influenced by a variety of factors, including supply and demand, government levies/taxes, and regulatory fees.

Fixed rate tariffs are usually available on a one, two, or three-year contract basis. As a general rule of thumb, the longer the contract, the higher the tariff.

Variable rate – Associated with fluctuations in the wholesale market, this means that the cost per unit of energy used does not remain at a stable rate throughout your contract. This means that even if your energy use remains exactly the same, the price you pay can still vary month-on-month.

Deemed rate/out-of-contract tariff – A rolling deal that puts you on an out-of-contract tariff. This basically means you’ll be paying more than you should be for energy – you won’t be protected by the stability that a contract affords you, and your rates will still very much be determined by fluctuations in the wholesale market and the amount of energy you use.

Rollover – Usually a last resort for the period between one contract ending and another beginning, these rates are usually very high. However, a rolling contract is only ever intended as a short-term-fix, although this type of contract can last up to 12 months. In short, be sure to know when your contract is due to end and agree a new deal before it does, to avoid paying over the odds for your basic energy needs.

VAT

The standard rate of VAT for gas is 20%. Although, if you run a charity or not-for-profit organisation, your business uses less than 4,397 kWh of gas energy per month (you can find this out on your latest bill), or if a minimum of 60% of energy is used for residential uses, then your business could be eligible for a 5% VAT reduction on your bill. If you think this sounds like you, you should ask for a VAT declaration form from your gas supplier.

Ethos and green energy concerns

It’s important to consider where your energy comes from, especially if you want your business to be environmentally sustainable. Gas is harder to produce sustainably than electricity, mainly because the research and development in the area is still fairly basic.

That being said, it is still more than possible to produce gas the greener way. This is achieved via a process called anaerobic digestion. It involves the natural breakdown of plants and other organic materials, which releases biogas that is then purified into biomethane.

Some examples of brands that provide green gas options include Bulb, and to a certain extent, British Gas.

Service

Lastly, customer service is vitally important when it comes to your energy provider. Do your research, take a look at the reviews from other customers, and see if the company you want to go with is known for its good customer support.

Business gas: Payment options

When it comes to paying your business gas bill, there are likely to be a few options available to you. These include:

• Cheque – some energy providers accept cheques, although you might miss out on discounts that are available on other payment methods
• Direct debit – perhaps one of the most popular ways of paying for bills, a direct debit offers an easy way to stay on top of your business payments. Plus, suppliers often offer a discount for paying in this way, which could be another incentive
• Online payments – whether through your online account with your supplier, or online banking via your bank, it’s possible to pay your bill digitally. Similarly, apps or other platforms may be available too

Cheap business gas

Due to the variable nature of business gas prices, different providers offer more affordable tariffs for different businesses. Just as no two businesses are the same, no two gas bills are the same either, so it’s always useful to compare prices.

Whilst we can’t point you straight to the cheapest provider, we are able to give you some handy hints and tips on how to find the lowest price for your business gas.

Firstly, it’s good to have a general idea of how much gas you’re likely to be using annually. This will help in getting the most accurate quote for the lowest price. Also, as a general rule of thumb, fixed rather than variable tariffs are usually cheaper. It’s also a good idea to know your contract/rate type (see above) when seeking a quote.

Note that some UK energy companies will offer lower business gas prices if you also take out a commercial electricity contract with them. However, businesses are generally not offered dual fuel combined energy tariffs, like those that may be provided for domestic customers.

Here are five things you should note down and have to hand when chasing a cheap commercial gas quote:

1. Your MPRN (Meter Point Reference Number)
2. Your annual gas usage (if you know it)
3. When you’re most likely to be using gas (time of day, days of the week, etc.)
4. Your business’ electricity usage (if you’re looking to get multiple energy contracts with the same provider)
5. The date your current contract expires (if you have one)

Having the above information handy during your quote-hunting will make it much easier to gain the most accurate quote possible from suppliers.

Once you’ve got all of the information you need, you can start shopping around for suppliers. Keep these things in mind when you do so:

• Commercial gas prices depend on the market rate
• Gas prices are calculated differently for business and domestic customers – you might need to shift out of your domestic gas mindset and engage your business brain
• VAT on gas is usually applied at a higher rate for businesses, but it’s worth looking into whether or not your business might be eligible for a tax break
• Providers often offer discounts for direct debit payments
• Find out if it’s possible to supply multiple sites with the same provider (if applicable)
• If you’re on the hunt for a business electricity provider too, consider using the same provider for both

To save on the legwork, why not let Startups bear the brunt of the task? All you have to do is fill in our online form at the top of the page, and you’ll receive tailored quotes from business gas suppliers.

How to save money on your business gas

It probably goes without saying that the more gas your business uses, the more expensive your bill will be. However, there are also certain costs that some businesses will encounter, which other businesses can avoid.

The Climate Change Levy (CCL)

The CCL is a tax on energy usage that encourages businesses to reduce emissions and act in a more environmentally friendly way. This can affect your business’ gas bill, and is determined by factors such as the scope, type, and purpose of your business. For more information regarding CCL rates, take a look at the Gov.uk guide.

You may be exempt, or benefit from reduced rates on certain taxes, if:

• You use a lot of gas because of the type of business you are e.g. supermarkets, farming
• Your business is so small that it doesn’t use a lot of gas

Some other key points to consider that could help to cut your business gas bills include:

• Be flexible with your payment method – if you can pay by direct debit, you may receive a discount from some providers
• Know your contract end date and terms – avoid the high charges of out of contract rates by understanding how your contract works
• Conduct an energy audit – by enlisting specialist expertise on how your business uses and consumes energy, including gas, you could better understand how to make changes that can positively affect your bills

How to switch business gas supplier

For more information on this topic, you can visit our full guide on why and how to switch energy providers to save your business money. But here are some of the bigger points to consider.

There are a number of reasons why your business might want to switch gas providers, such as to save money on your bill, find a more sustainably produced supply, or because you’re moving premises to a different area. 

When switching suppliers, remember:

• Your new supplier is responsible for arranging the switch
• When you switch supplier, the same gas pipes are used
• Suppliers don’t tend to offer cooling off periods for commercial gas

All the key information you’ll need to switch commercial gas suppliers can be found on your bill. This includes:

• The name of your current supplier
• How much gas your business uses
• The meter number

When the time comes to end a contract, you’ll need to take the following steps:

• Pay any remaining fees to clear your account
• Organise any credit to be paid to your business (if applicable)
• Do a final meter read

Switching gas suppliers: A step-by-step guide

1. Find your gas bill
2. Review quotes from a range of suppliers
3. Choose the tariff that best matches your business’ needs
4. Work out if any additional costs apply (e.g. exit fees)
5. Pick a new contract
6. Let your existing supplier know that you plan to switch (if relevant)
7. Pay up any outstanding charges with your existing provider
8. Wait for your new supply to start with your chosen provider

Note that if you’re ending a fixed tariff prior to the set end date, then you may need to pay exit fees. Be sure to assess what you will gain or save by paying these ahead of switching. 

You’ll also need to ensure that you switch during the renewal period, which is when the existing contract (if applicable) allows you to change providers. 

Business gas suppliers and prices: The FAQs

In this section, we round up and answer some of the most common queries you may have about business gas suppliers and prices.

• Is it possible to find business gas suppliers with no standing charge?

While it is possible for some energy providers to offer unit price-only tariffs for residential customers, businesses can generally expect to pay standing charges. A standing charge relates to the cost of getting the energy supply to the end user.

• Business gas and domestic gas: Which is cheaper?

Generally, unit prices for business gas supply are cheaper than domestic ones, as they’re based on market prices. However, businesses are charged a higher rate of VAT, and may be subject to taxes like the Climate Change Levy in addition to their gas prices.

• How to find the best business gas suppliers

There are lots of gas suppliers out there, and it can be difficult to know which is best for your business. To help you make your decision, do your research: read online reviews, ask other small business owners for recommendations, and compare business gas quotes.

Next steps: Compare business gas suppliers

At this point, you’ve learned more about the options available to you when it comes to choosing a business gas supplier. We’ve provided key information, including the best suppliers, as well as how to choose a supplier and find cheap rates. Plus, we’ve looked at how to switch suppliers.

Next, read our guides to business electricity suppliers and small business energy comparison for more general information.

Alternatively, for more detailed information based on your small business specifically, simply complete the form at the top of the page and compare quotes for business gas now.