Business energy out-of-contract rates (UK): what you’ll pay and how to fix it

Out-of-contract rates (also called deemed or rollover rates) can be significantly higher than agreed business energy contracts. This guide explains what they are, when they apply, and the fastest ways to move onto a better tariff.

  • Understand deemed vs rollover vs end-of-contract pricing (plain English, UK-specific)
  • See realistic cost scenarios, common pitfalls, and what suppliers can charge for
  • Get a whole-of-market quote with no obligation (we’ll ask the minimum details)
Get your business energy quote How out-of-contract rates work

Small print: Prices and availability vary by supplier, meter type and profile class. Estimates in this guide exclude VAT unless stated.

Fast answer: what are out-of-contract business energy rates in the UK?

If your business doesn’t have an agreed contract in place, your supplier can charge an out-of-contract price. Depending on your situation, this is typically either:

Deemed contract rates
Often applied when you’ve moved into new premises or you’re taking supply without signing a new contract. Prices can be higher and terms vary by supplier.
Rollover / out-of-term rates
Sometimes applied when a fixed contract ends and a new one hasn’t been agreed. Some suppliers move you onto a variable rate; others may roll onto a default tariff. Always check your end-of-contract letter/terms.

Why it matters: Out-of-contract rates can be materially higher than negotiated business tariffs, especially for non-half-hourly electricity (standard business meters) and small/medium gas sites. The quickest fix is usually to agree a new contract (with your current supplier or a new one) and confirm the start date in writing.

Key takeaways (for busy owners)

  • Check your meter type first (smart, non-half-hourly, half-hourly) because pricing structures differ.
  • Ask your supplier what you’re on today: deemed, variable, or rollover—and request the unit rate (p/kWh) and standing charge (p/day).
  • Don’t wait for “the perfect time”: if you’re out of contract, even a short period can add cost.
  • Confirm contract end date, notice windows, and any exit fees before switching.
  • VAT position matters: many business quotes are shown excluding VAT; most pay 20% unless eligible for reduced VAT (e.g., certain charities) or domestic-type supply.

Get out-of-contract: compare business energy deals

If you’re currently on out-of-contract rates, we can compare whole-of-market business energy options and help you move onto an agreed tariff. Provide a few details and we’ll come back with available prices for your meter type and location.

Tip: If you have it, keep a recent bill to hand. Your MPAN (electricity) or MPRN (gas) helps suppliers price accurately—but it’s not essential to start.

How the quote process works

  1. We confirm what you’re currently on (deemed/rollover/fixed) and your meter type.
  2. We request prices across suitable suppliers for your usage profile and credit position (where relevant).
  3. You choose whether to proceed—no obligation.

Important: Switching timelines vary. Some out-of-contract situations allow quick action, but your actual start date depends on supplier rules, meter details, and industry processes.

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How out-of-contract business energy rates work (UK)

“Out of contract” is used as a catch-all term, but your rights and pricing depend on why you’re without a fixed agreement. Here’s how it typically breaks down.

1) You moved in (new occupier)

Supply usually continues automatically. You may be placed on a deemed contract until you agree new terms or switch. Contact the supplier ASAP and keep evidence of your move-in date.

2) Your fixed deal ended

You may be moved onto variable/rollover pricing. Your end-of-contract notice should say what happens next. Some businesses can renew with the same supplier or switch.

3) You’re in a dispute or admin gap

Billing and contract status can become unclear after tenancy changes or supplier transfers. Ask for confirmation of your contract status and rates, in writing, and keep copies of bills and meter reads.

UK nuance: Business energy is regulated differently from domestic energy. Protections can vary depending on whether you’re classed as a microbusiness and the nature of your contract. If you’re unsure, ask your supplier how they classify your business and what complaints process applies.

Compare: out-of-contract vs fixed business contracts

This table is designed to help you decide what to do next. Actual rates depend on your meter type (e.g., HH vs NHH), usage pattern, location, payment method, and supplier risk checks.

Option Price certainty Typical features Common trade-offs Best for
Deemed / out-of-contract Low Supply continues without you signing a deal Can be expensive; terms vary; harder to budget Short-term stopgap only
Fixed contract (1–3 years) High Agreed unit rate and standing charge; easier forecasting May include exit fees; renewal windows matter Most SMEs that want predictability
Flexible / pass-through (often HH) Medium Can track market; suited to larger/HH profiles More complex bills; risk management required Energy-aware businesses with higher usage

Decision checklist: signs you should act now

  • Your unit rate/standing charge changed and you didn’t agree new terms.
  • Your contract end date passed (or you can’t find it in writing).
  • You’ve moved premises and bills are addressed to “The Occupier”.
  • You’re paying by variable Direct Debit and invoices fluctuate unexpectedly.
  • You have a smart/HH meter and charges look unfamiliar (e.g., multiple line items).

Who it suits / who it doesn’t

Out-of-contract can suit:

  • Very short gaps during a move-in while you collect details
  • Temporary occupancy where you’ll leave imminently (still confirm liability)

Out-of-contract usually doesn’t suit:

  • Businesses needing predictable cash flow
  • Sites with high consumption or tight margins
  • Any business planning to stay put beyond a few weeks

Two realistic cost scenarios (with assumptions)

These are illustrative estimates to show why out-of-contract pricing can bite. They are not quotes. We assume single-rate electricity (no day/night split), bills shown ex VAT, and 30-day months.

Scenario A: small café (electricity only)

  • Usage: 1,200 kWh/month
  • Out-of-contract unit rate (example): 38p/kWh
  • Fixed contract unit rate (example): 27p/kWh
  • Standing charge: 60p/day (same in both examples)

Estimated monthly cost

Out-of-contract: (1,200 × £0.38) + (30 × £0.60) = £474

Fixed example: (1,200 × £0.27) + (30 × £0.60) = £342

Difference (illustrative): ~£132/month

Assumptions: single-rate meter, similar standing charge, no additional pass-through line items.

Scenario B: light industrial unit (gas + electricity)

  • Electricity usage: 6,500 kWh/month
  • Gas usage: 18,000 kWh/month
  • Out-of-contract examples: 35p/kWh elec, 11p/kWh gas
  • Fixed examples: 25p/kWh elec, 7p/kWh gas
  • Standing charges (examples): 75p/day elec, 55p/day gas

Estimated monthly cost

Out-of-contract: (6,500×£0.35)+(18,000×£0.11)+(30×£0.75)+(30×£0.55) = £4,295

Fixed example: (6,500×£0.25)+(18,000×£0.07)+(30×£0.75)+(30×£0.55) = £2,945

Difference (illustrative): ~£1,350/month

Assumptions: simple unit-rate model; some HH/flexible contracts may itemise non-energy charges separately.

Reality check: Your actual “out-of-contract” price may include different standing charges, different unit rates by time band (HH), and other elements. Use the scenarios to understand the direction of travel, then request your exact current rates from the supplier.

Costs, exclusions and common pitfalls (UK)

Out-of-contract situations often go on longer than intended because the paperwork is unclear. These are the issues that most commonly delay switching or inflate bills.

Standing charge & minimum charges

Even with low usage, standing charges can be significant. Some tariffs also have minimum charges or capacity-related items, especially for larger sites.

VAT and climate levies

Business quotes are often shown ex VAT. Eligibility for reduced VAT or exemptions can apply in specific cases; confirm with your accountant and supplier.

Meter type and profile class

Half-hourly meters can price very differently to standard meters. A mismatch between your meter data and what’s quoted can delay a switch.

Notice windows & auto-rollovers

Some contracts include renewal notice periods. Missing them can limit options or keep you on default pricing longer. Check your contract terms and supplier communications.

Early termination / exit fees

If you’re still in contract, leaving early may trigger fees. If you’re truly out-of-contract, exit fees are less likely—but always confirm in writing.

Change of tenancy and back-billing

If the wrong party is being billed, it can cause disputes. Keep lease dates, handover meter reads, and a clear trail of who is responsible for energy costs.

What to ask your supplier today (copy/paste): “Please confirm whether my account is deemed, variable, rollover or fixed; the current unit rate(s) in p/kWh; standing charge in p/day; contract end date (if any); and whether any termination fees apply.”

FAQs: business energy out-of-contract rates (UK)

Are out-of-contract rates the same as deemed rates?

Often, yes in everyday language. Strictly, a deemed contract is one common out-of-contract situation (e.g., you moved in and started using energy without agreeing terms). “Out-of-contract” can also refer to variable/rollover arrangements after a fixed deal ends.

Can my supplier put me on out-of-contract rates without telling me?

Suppliers typically issue end-of-contract communications and publish deemed terms, but the practical reality is many businesses miss emails/letters—especially during moves. If you suspect you’re on out-of-contract pricing, request written confirmation of your current rates and contract status.

How quickly can I switch if I’m on deemed or rollover rates?

It depends on your meter type, supplier processes, and whether any contract terms still apply. Some switches progress quickly once details are correct, but timings can vary. The fastest route is usually: confirm your exact current status and rates, then agree a new contract start date (or initiate a supplier switch) as soon as possible.

Do out-of-contract rates apply to both gas and electricity?

Yes. You can be in-contract for electricity and out-of-contract for gas (or vice versa), especially after a tenancy change or if contracts were agreed at different times. Check each supply separately using your MPAN (electricity) and MPRN (gas) if available.

I’ve just moved into premises—am I responsible for the previous tenant’s debt?

You’re typically responsible for energy you use from your move-in date, not a previous occupier’s charges. Disputes can happen if handover dates or meter reads are missing. Keep your lease start date, a move-in meter read (photo if possible), and contact the supplier promptly to open an account.

What information do I need to get an accurate quote?

A postcode and business details can be enough to begin. For more accurate pricing, suppliers may ask for annual kWh usage, your current supplier, and meter identifiers (MPAN/MPRN). For half-hourly electricity, your consumption profile and time-of-use pattern can affect pricing materially.

Are there protections for small businesses?

Some protections can apply depending on whether you qualify as a microbusiness and your supplier’s complaint handling obligations. If you believe you’ve been treated unfairly, ask the supplier for their complaints procedure and eligibility criteria, and keep written records of all communications.

Will switching affect my supply?

No—your physical supply continues. Switching changes who bills you. Issues typically arise from incorrect meter details, disputed occupancy dates, or outstanding contractual obligations, not from the act of switching itself.

Trust, transparency and how we assess out-of-contract rates

Page accountability

How we assess this topic

We focus on what a UK business owner needs to resolve out-of-contract pricing quickly: definitions, decision paths, and the data points that determine quotes (meter type, usage, region, payment method and contract status).

Limitations (important)

There is no single “UK out-of-contract rate” because suppliers publish and update their deemed/variable prices and apply them differently depending on contract type, meter setup and risk checks. Always request your current rates directly from your supplier.

Assumptions used in our examples

  • Electricity examples use a single unit rate and a single standing charge (some sites have multi-rate or HH pricing).
  • Costs shown are ex VAT unless explicitly stated; VAT treatment can differ by eligibility and supply type.
  • Months treated as 30 days for standing charge calculations.
  • We do not include potential additional bill line items (common on HH/flexible contracts) where they vary widely.

What we won’t do: We won’t promise specific savings or a guaranteed switch date. We’ll provide options based on supplier availability and your meter/usage details, then you decide.

Sources and further reading (UK)

Ready to move off out-of-contract rates?

Request a quote and we’ll confirm your options for your meter type, location and usage. No obligation—just clear next steps.

Get your business energy quote Review the comparison table

If you’re mid-move, have multiple meters, or suspect a tenancy billing issue, include it in your message when we contact you—those details can affect timelines and eligibility.

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Updated on 23 Apr 2026