Ensuring you have the best value business energy contract can make a huge difference in how much you pay for your energy, and taking the time to select the best energy supplier for your needs is advised. But what happens when your business becomes trapped in a contract paying over the odds, or you have had disappointing service from your supplier?

This guide will give you all the information you need to cancel business energy contracts and find an alternative supplier.

Business Electricity Contracts

In the UK, business electricity contracts will usually be for a fixed period of between 12 months and three years. It is essential that you thoroughly research the deal you are entering into because you will be locked into this agreement until the contract expiration date.

We make it easy to find and compare the best business energy suppliers with our handy comparison tool. By entering your details, you will see the best options for your business from the Big Six, as well as smaller niche suppliers that may be able to tailor a contract to suit you.

As your energy agreement comes to an end, you might consider shopping around for a new, improved deal. It is important to remember that it will be your responsibility to cancel your contract with your supplier before an automatic renewal takes place.

Failure to notify your supplier in time by issuing a letter of termination may result in you being stuck on more expensive terms.

If you run a microbusiness with less than ten employees and an annual turnover of less than £1.7m, uses less than 100,000 kWh per year, or uses less than 293,000 kWh of gas annually, your energy supplier must contact you three months before the contract comes to an end.

The energy watchdog Ofgem set this rule in 2015, which makes suppliers give microbusinesses all the details they would need about potential price increases that would occur with an automatic contract renewal and the information on how they can terminate their current contract.

Only microbusinesses with the criteria mentioned above will receive this reminder letter, and larger businesses will have to take care of deadlines and cancellations themselves.

How To Cancel A Business Electricity Contract

Business electricity contracts will have an official end date. Prior to this, there will be a notice window of opportunity that will be detailed in your agreement. These are vital to know as you will have to send a letter of termination in the window to ensure your contract is stopped on the end date.

You will not receive reminders about the end date or notice period. Keeping a note of these and setting reminders to avoid missing them is advisable.

When your letter of termination has been sent and accepted, you will have to start the process of shopping around for a new supplier. If you fail to switch to a new energy supplier by the end date of the old agreement, the out-of-contract rates you will have to pay for your energy supply will be considerably higher than contracted rates.

At Business Energy UK, we're here to help you find and compare the best business gas and electricity suppliers - taking away the stress and time it takes to switch business energy suppliers. You'll be free to concentrate on your work, knowing your new business energy contract will start the day after the expiration of your old one.

We always recommend taking meter readings on the last day of your contract with your old supplier and the first day of your agreement with your new supplier so you can check your energy bills are correct.

Electricity Cancellation Letter Guide

A termination notice letter is required to state your intention of leaving your current contract when it expires. The information you provide must be correct as it is time-sensitive, and you don't want it to be sent back to you to be amended. You will need this to be accepted by your current supplier before the deadline.

This is why we have provided a business electricity cancellation letter guide so you will be able to get everything sorted quickly and easily.

  • You should use company-headed paper if possible, and below this, you should enter the company's name, its registered address, and company number.
  • You can then address the letter to "whom it may concern" before stating the intention of your business to formally terminate the contract with the current supplier by the agreed date.
  • Following this, you should provide the meter point reference number, the current contract's end date, and supply address.
  • Reiterate the reasons why the letter has been sent and request written confirmation that it has been received and will be actioned.
  • The letter should be signed off by hand, include your printed name, your position within the business, and the date.

Here's an example of how the cancellation notice letter should look;

Company headed paper
John Smith's Paper
1 Main street
L10 01L
Company Number: 99999

To whom it may concern,
On behalf of John Smith's Paper, I am writing to formally terminate our (suppliers name) supply agreement as of (contract end date).

Meter point reference number - 999999
Termination date - 01/01/2022
Supply address - 1 Main street, London, L10 01L

Please provide written confirmation of receipt of this letter and assurances that we will be able to switch to a new supplier when our current agreement ends as soon as possible.

Yours faithfully,
(Sign name)
(Print name)
Head of Operations

Sending your termination letter by recorded delivery will let you know it has been received and serve as proof if your current energy contract is not actioned as requested.

How Is Terminating A Business Energy Contract Different From Cancelling A Domestic Energy Contract?

You may have had experience cancelling a domestic energy contract, which is a lot more straightforward than cancelling an agreement with a business energy supplier.

When it comes to domestic, contracts don't tend to be as long, and you will be able to cancel your current contract and switch to a new supplier within 49 days of your current deal ending.

Cancelling is typically straightforward for domestic energy users, and calling your supplier would usually suffice.

Cancelling with a business energy supplier is a lot more complex. You will have to see out your contract and ensure you stay on top of all the dates advised, including your contract expiration date and the notice dates for termination.

You will need to ensure you send your notice of termination letter within the allotted timeframe for it to be accepted.

Making sure you find the right supplier and fully understand the contract you are entering into is critical in ensuring you are not tied into a contract that you don't want to be.

Reasons For Terminating A Business Energy Contract

There are many reasons you might consider terminating a business energy contract and switching suppliers that include;

Your Contract Is Ending

If you are coming to the end of your agreed contract, you may want to shop for the best deal on the market.

It could be that you entered into a long term fixed-rate contract that has been more expensive than a variable contract would have been or vice versa. Taking the time to explore the current market for business energy contracts will help you to determine the best deals available.

You Have Received Poor Service

You might have found that any issues you encountered during your contract were not handled to the standard you would expect. You might also have found that you suffered power outages more frequently than you would expect beyond essential maintenance.

When selecting a new energy supplier, it can be worth reading online reviews to better understand the service providers provide. It is worth noting that people are a lot more likely to voice their opinion after a bad experience, so you will have to weigh this up.

It is possible to check published results of official complaints and resolutions with the Energy Ombudsman that will present a better picture of how a company deals with problems.

You Are On A Tariff That Does Not Suit Your Business Needs

If you missed the date for the expiration of your business energy contract, you would automatically be put onto a rollover or deemed rate contract that would usually be higher than your previous tariff.

Rollover and deemed rate contracts tie you in from anywhere from 1 to 12 months, although most energy companies are moving away from long term contracts. This should be a consideration when switching suppliers.

If you do find yourself on a rollover or deemed rate contract, check to see how long you are tied in for and make arrangements to cancel and switch as soon as possible as it is likely you will be able to find business energy contracts that can save you money.

How To Compare Energy Deals

If you are a new business or an established business whose current contract is running out, exploring the best energy deals can help to make huge savings.

At Business Energy UK, we take the hassle out of comparing business electricity and business gas contracts - so you can make the best decision for your business and save money.

Rather than taking hours out of your working day to contact and research all the best UK business energy suppliers, simply enter your details into our comparison tool for results in seconds.

From here, you can compare the tariffs from all the biggest suppliers as well as a whole host of smaller, independent suppliers that may be in the position to offer a service that is more suited to your business needs.

After you've decided which supplier you want to move to, switching is very straightforward. All you will need to do is provide your new supplier with information, including your business name, the business address, your old energy supplier, and your average energy consumption.

You will need to provide your banking details for them to be able to set up a direct debit, but after that, you should be able to concentrate on business and let your new supplier take care of the rest.

They should get in touch with your old supplier and confirm the switchover date, and this can take up to around three weeks.

You must take into consideration all potential costs. There can be initial set-up costs or security deposits, or you may be required to pay for specific meter instalments.

Frequently Asked Questions

If you do choose to leave your contract early, it is likely that you will be subject to an early exit fee. This should be stated in your agreement, but contacting your supplier is the best course of action if you have any questions.

The cost of your early exit fee would be determined by your supplier and may differ depending on how long is left on the existing contract.

Most energy contracts that businesses enter into will not have a cooling-off period. This is why you must check the full terms and conditions of the agreement before signing and thoroughly researching the energy market.

Having a better understanding of what tariffs are available, as well as the current pricing, will let you know whether the energy deal presented to you is the best for your needs.

Having a complete understanding of your new contract before agreeing to it is critical. This will detail how the contract can be ended and the initial contract term.

Business contracts are more difficult than domestic contracts to leave, and you would usually be tied into a term between 1 and 3 years with a minimum notice period at the end.

Ensuring you know the dates that your termination notice will need to be provided is key to ensuring you can leave your current energy provider and enjoy a new energy contract with better rates.

Because your current energy supply is linked to your premises, moving would mean transferring your current energy deal over to your new premises. Contacting your supplier to ensure this is possible should be your first action.

If it is possible, providing your supplier with all move dates should help the switch between premises happen more smoothly. Taking a reading from the old premises and new is also advised, so there are no mixups with your bill.

If a contract can't be transferred, you should check your agreement to see if a penalty early exit fee would be imposed. If this is the case, but you want to stay with the same supplier, it is sometimes possible that they will waive this fee when you take out a new contract.

Comparing energy costs if you move is recommended, even if you do end up with a penalty fee. It could turn out that switching your suppliers would make sufficient savings to make moving financially viable, even when you add in the cost.

Providing your current energy supplier with notice as soon as possible and at least one month in advance is advisable. You should also give the new address so you will receive your final bill. This will also allow your current provider to check if they currently supply to the new premises. If they do, carrying your current contract over is a lot easier.

If they don't currently supply gas and electricity to the new premises, a new contract will need to be agreed, or you will have to switch suppliers.

Advising your landlord of any energy supplier changes is recommended. On the other hand, if you pay energy costs directly to your landlord, it will be their responsibility.

Switching to a new business gas or electricity contract will not result in power outages. Your new supplier will provide your energy on the date agreed. There will not be any need for other disruption as the service will be supplied through the existing pipes and cables.