Business Energy Back-Billing: The 12-Month Rule

Short answer

If you are a microbusiness, your supplier can’t bill you for gas or electricity you used more than 12 months ago if it never billed you correctly for it. The rule doesn’t apply if you blocked meter readings or took energy illegally. Larger businesses aren’t covered by this rule.

Key takeaways

Microbusinesses can’t be billed for energy used over 12 months ago if they weren’t correctly billed.
The rule doesn’t apply if you blocked meter readings or stole energy.
Larger businesses aren’t covered by this rule.

What back-billing is

A back-bill is a catch-up bill for energy you used but weren’t charged for properly, usually because the supplier relied on estimates or had a billing problem. They can be large and arrive with little warning.

The 12-month rule

Ofgem’s back-billing rule applies to domestic customers and microbusinesses. Your supplier can’t charge you for energy used more than 12 months ago if it didn’t send you a correct bill for it at the time.

It doesn’t apply where the customer has behaved obstructively or unreasonably, for example by repeatedly stopping the supplier from reading the meter, or where energy has been stolen.

Are you a microbusiness?

You count as a microbusiness if any one of these applies:

You use no more than 100,000 kWh of electricity a year.
You use no more than 293,000 kWh of gas a year.
You have fewer than 10 employees (or full-time equivalent) and an annual turnover or balance sheet of no more than £2 million.

Most small shops, cafés, salons, garages and offices qualify. See microbusiness energy rights.

What to do if you get a back-bill

Check the dates. Which period does the bill cover? How much is for energy used more than 12 months ago?
Check the readings. Were earlier bills estimated? Take a photo of your meter now, with the date.
Write to the supplier. Say you are a microbusiness and ask for any charges older than 12 months to be removed under Ofgem’s back-billing rule.
Ask for a payment plan for the rest if you need one.
Escalate if needed. If it isn’t sorted in 8 weeks, or the supplier sends a deadlock letter, you can take it to the Energy Ombudsman. See business energy complaints.

How to avoid one

Send meter readings regularly, ideally monthly, and keep dated photos.
Check each bill for an "E" (estimated) next to the reading.
Tell your supplier when you move in or out, with a reading on the day.
Ask about a smart or AMR meter that sends readings automatically.

Sources

Ofgem: Back billing rules (ofgem.gov.uk)
Ofgem: Energy advice for businesses (ofgem.gov.uk)

Questions

Does the rule apply to larger businesses?

No. It applies to domestic customers and microbusinesses. Larger businesses should check their contract terms.

What if I never gave meter readings?

Not giving readings isn’t the same as blocking them. The exception is for obstructive or unreasonable behaviour, such as repeatedly refusing access.

Can the supplier still bill the last 12 months?

Yes. The rule limits how far back they can go, not whether they can bill for recent use.

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Business energy back-billing: the 12-month rule