Bills and meters
How to read a business electricity bill
Short answer
The key items on a business electricity bill are your MPAN, contract end date, consumption, unit rate, standing charge, Climate Change Levy and VAT. Find those and you can check your bill and compare any offer.
Key takeaways
- Find the MPAN, end date, consumption, unit rate, standing charge, CCL and VAT.
- Check whether readings are actual (A) or estimated (E).
- Check that the VAT rate matches your use.
Supplier formats vary
A. Supply number (MPAN)
Identifies your electricity supply point. You'll need it for any quote. See MPAN explained.
B. Contract end date
The most important date on the bill. Missing it can mean out-of-contract rates. Not every supplier prints it on the bill; if it isn't there, ask them.
C. Consumption and meter readings
The kWh used in the billing period, worked out from the previous and current readings. Each reading is usually marked as actual (A) or estimated (E). Long runs of estimated bills can lead to a large catch-up bill later, so send readings regularly or ask about a smart meter.
D. Unit rate
Pence per kWh. Some meters have more than one rate, such as day and night. Check the rates match your contract.
E. Standing charge
Pence or pounds per day, multiplied by the number of days in the period. See standing charges.
F. Climate Change Levy
An environmental tax on business energy, charged per kWh at a rate set by government. Low-use supplies and some other uses are exempt.
G. VAT
Usually 20% for business supplies. If you use no more than 33 kWh of electricity a day on average, you should pay 5% and no Climate Change Levy.
Other things you may see
- Capacity or availability charges on half-hourly supplies
- Reactive power charges on some larger supplies
- Pass-through charges if your contract passes some costs through
- Previous balance and payments, which you should check against your records
A quick bill check
- Are the readings actual rather than estimated?
- Do the rates match your contract?
- Is the VAT rate right for your use?
- Is the billing period sensible, with no overlaps or gaps?
Gas bills
A business gas bill has the same structure, with an MPRN instead of an MPAN and an extra step that converts your meter reading from volume to kWh. See gas contracts for how that conversion works.
Billing errors worth checking for
- Estimated readings far from your actual use
- A meter treated as imperial when it is metric, or the reverse
- Rates that don't match your contract
- 20% VAT on a supply that qualifies for 5%
- Charges for a period before you took over the premises
If something looks wrong
Contact your supplier first with the bill, your meter readings and your contract. If the complaint isn't resolved, micro and small businesses may be able to take it to the Energy Ombudsman once the supplier's process is complete.
Sources
- HMRC: Climate Change Levy rates (gov.uk)
- HMRC: VAT Notice 701/19, fuel and power (gov.uk)
- Ofgem: Energy advice for businesses (ofgem.gov.uk)
Questions
What does E mean next to a reading?
The reading is estimated. Send an actual reading to keep bills accurate.
Why am I paying 20% VAT?
Most business supplies pay 20%. Low-use supplies under the de minimis threshold qualify for 5%.
Where is my contract end date?
Often near the tariff details. If it isn’t shown, ask your supplier.
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