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If your business is small, you have more protection on your energy contract than you probably realise. Ofgem gives micro businesses specific rights around contracts, renewals, billing and brokers, designed to stop the smallest firms being treated unfairly. This guide explains whether you count as a micro business, what protections you get, and how to use them.
In short. A micro business is defined by low energy use or a small headcount and turnover. If you qualify, your supplier must tell you your contract end date and renewal terms, cannot back bill you beyond twelve months, must treat you fairly under the Standards of Conduct, and must be clear about any broker cost. Knowing you qualify is the first step to using these rights.
Ofgem sets clear thresholds, and you qualify as a micro business if you meet any one of them.
Low energy use. You use less than 100,000 kWh of electricity a year, or less than 293,000 kWh of gas a year.
Small headcount and turnover. You have fewer than ten employees, or their full time equivalent, and an annual turnover or balance sheet total not exceeding 2 million euros.
Meeting just one of these is enough. A great many small shops, offices, cafes and trades fall inside the definition without ever knowing the protections that come with it.
Clear contract information. Your supplier must tell you your contract end date and the notice period to switch or renegotiate, so you are not caught out by an automatic rollover onto expensive rates.
The Standards of Conduct. Suppliers must treat micro business customers fairly and honestly across billing, contracting and switching, backed by Ofgem powers to fine those that do not.
Back billing protection. A supplier cannot send you a catch up bill for energy used more than twelve months ago if it was not your fault it went unbilled, for example after a long run of estimates.
Broker transparency. Where a third party broker arranges your deal, rules require the cost of that broker to be made clear, so it is not buried invisibly in your unit rate.
Access to support. Suppliers must signpost micro business customers to Citizens Advice for help with disputes, a protection since extended to small business customers as well.
The biggest risk for a small business is not a dramatic overcharge but a quiet one. Rolling off a fixed deal onto a default rate because nobody flagged the end date, or paying a broker margin nobody disclosed, are exactly the situations these rules exist to prevent. They do it by forcing suppliers to be clear about dates, terms and costs.
The protections do not make decisions for you, but they put the information you need in front of you. Used well, they turn energy from something that happens to your business into something you actively control.
✓ You must be told your contract end date and renewal window.
✓ You cannot be back billed for energy used more than twelve months ago through no fault of your own.
✓ Broker costs must be made transparent to you.
✗ Assuming the protections apply without ever checking your qualifying status.
✗ Ignoring renewal information, which is exactly what these rules put in front of you.
One of the most useful protections concerns renewals. Because your supplier must tell you when your contract ends and how much notice you need to give, you have a clear window in which to compare the market and either switch or renegotiate. Miss it and you can still move, since default rate customers are not tied in, but using the window is how you avoid ever landing on those expensive rates in the first place.
If you are a small business, check first whether you meet any one of the micro business thresholds, because the protections only help if you know you qualify. Then use them: note your contract end date, watch for renewal information, and ask about any broker cost before you sign.
1. Confirm you qualify. Check your annual usage, or your headcount and turnover, against the thresholds. Meeting any one is enough.
2. Record your contract end date. Your supplier must provide it, so diarise it with a reminder ahead of the renewal window.
3. Question estimated bills. If a large catch up bill arrives, check whether back billing rules limit it to the last twelve months.
4. Ask about broker costs. If a broker arranged your deal, ask what they are paid and how it appears in your rate.
A business that uses less than 100,000 kWh of electricity or 293,000 kWh of gas a year, or has fewer than ten employees and turnover under 2 million euros. Meeting any one qualifies you.
A rule that stops a supplier billing you for energy used more than twelve months ago where it was not your fault it went unbilled, protecting you from surprise catch up charges.
The rules apply if you qualify, but you benefit most by knowing your status and acting on the information suppliers must give you, such as your contract end date.
There are transparency rules requiring broker costs to be made clear, so if a third party arranged your deal you can ask what they are paid and how it sits in your rate.
Ofgem rules requiring suppliers to treat business customers fairly and honestly in billing, contracting and switching, backed by the power to fine suppliers that fall short.
It can. A sole trader or small partnership using little energy, or with few staff and low turnover, may meet the thresholds and gain the same protections as a small limited company would.