Business Energy Renewal Checklist for Winter 2026: Care Homes, HMOs and Small Businesses

Last updated: 26 October 2026

If your business energy contract ends between now and spring 2027, start the renewal now: find your end date and notice terms, list every meter, check your VAT and Climate Change Levy paperwork, and compare quotes on total yearly cost before the contract rolls over. Ofgem says there is no cooling-off period once you agree a business contract, and a rollover is usually for 12 months, possibly at a higher rate, right when winter usage peaks. For a care home using 200,000 kWh of electricity a year, a Climate Change Levy charged in error adds £1,602 a year at the 2026 rate of 0.801p per kWh. For care homes, qualifying electricity in Great Britain carries 0% VAT from 1 October 2026 to 31 March 2027, and the Climate Change Levy is 0.801p per kWh from 1 April 2026. This SwitchSquid checklist is for care home owners and managers, HMO landlords and small business owners, and sets out what to do, when, and which mistakes cost most in winter. If you get quotes through our form, we may be paid by the supplier you choose; the quote service is free to you.

Sources: Ofgem: get a business energy contract, HMRC VAT Notice 701/19, GOV.UK: Climate Change Levy rates, GOV.UK: exemptions from Climate Change Levy and DESNZ non-domestic energy prices, all checked on 26 October 2026. This is general information, not legal or tax advice.

Why winter renewals need extra care

Most business energy mistakes are about timing, and winter makes them dearer. A care home runs heating, hot water, laundry and kitchens around the clock. An HMO’s communal heating and lighting work hardest from November to March. A shop or café uses more lighting and heating as the days shorten. If a contract ends in winter and nobody acts, the supply can move onto rollover or out-of-contract rates in the months when you use the most energy.

Ofgem’s guidance makes three points that shape every renewal:

• Your contract sets your price. Business tariffs are agreed between you and the supplier, so the rates in the contract are what you pay.

• No cooling-off period. Once you agree a business contract, you are normally bound by it. Read the terms before you say yes.

• Rollover risk. If your contract renews automatically, the new fixed term is usually 12 months and may be at a higher rate.

Ofgem treats you as a microbusiness if you have fewer than 10 employees and a turnover or balance sheet of no more than £2 million, or if you use up to 100,000 kWh of electricity or 293,000 kWh of gas a year. Many small HMO portfolios and high-street businesses qualify, which means your supplier must give you renewal price information before your contract ends. Most care homes have more staff and use more energy than that, so check before you rely on these protections.

The winter renewal checklist

Six months before the end date is ideal. If you are closer than that, start at the top and move quickly.

Care homes: get the VAT and levy right before you renew

HMRC’s Notice 701/19 lists homes providing care for the elderly or disabled as residential accommodation, so their fuel and power counts as qualifying use. That normally means the reduced rate of VAT instead of 20%. From 1 October 2026 to 31 March 2027, qualifying electricity in Great Britain is zero-rated. If 60% or more of a supply is for qualifying use, the whole supply is treated as qualifying; below 60%, only the qualifying part gets the lower rate.

Two things often go wrong at renewal:

• The VAT declaration doesn’t follow you. A declaration sent to your old supplier doesn’t carry over. Your new supplier needs its own, stating the qualifying-use percentage for each site.

• The levy is charged by default. GOV.UK lists homes for the elderly and disabled, children’s homes and hospices as domestic use excluded from the Climate Change Levy. The main rate is 0.801p per kWh from 1 April 2026 and 0.827p from 1 April 2027. For a home using 200,000 kWh of electricity a year, 0.801p is £1,602 a year in levy that shouldn’t be on the bill.

Ask every supplier quoting for your home to confirm the VAT rate and levy treatment in writing, so you compare like with like. Our care home energy VAT guide and care home renewal checklist go into more detail.

HMO landlords: sort out who holds each supply

For landlords, the first question is which supplies are yours. Communal hallway lighting, door entry, lifts, shared laundry and common-area heating are usually on a landlord meter, often on a business contract. Room supplies in a bills-included HMO are usually held by the landlord too. Supplies that tenants pay directly are normally domestic contracts in the tenant’s name and aren’t part of your renewal.

Winter is also when void periods catch landlords out. If a room or flat is empty between tenancies and nobody has told the supplier, the supply can fall onto deemed rates. Take dated meter readings and photos when a tenant leaves, and keep the account in your name until the next tenancy starts. Our guides to void periods and HMO sub-metering and recharging explain both.

What businesses are paying: the government benchmark

DESNZ publishes the average price businesses actually paid each quarter. These are all-in prices per kWh, including standing charges and the levy but not VAT, for April to June 2026, published on 29 September 2026.

If your all-in price per kWh is well above the figure for your size band, a quote is worth getting now. To work it out, divide your total charges before VAT by the kWh used over the same period.

How to compare renewal quotes

1. Total yearly cost. Multiply your yearly kWh by the unit rate, then add 365 days of standing charge. A low unit rate with a high standing charge can cost more on a small supply.

2. Contract length. One to three years is common. A longer fix gives certainty across more than one winter, but check the notice terms at the end.

3. Exit fees. Know what leaving early would cost, especially if you might sell a home or property.

4. Every meter included. A meter left off the new contract can sit on out-of-contract rates unnoticed.

5. VAT and levy treatment. Make sure each quote reflects your qualifying use and any levy exemption.

6. Broker fees. Ofgem expects brokers to be open about how they are paid. Ask for the fee to be shown in the quote.

What happens if you miss the end date

If the end date passes without a new contract, your supplier may roll you onto a new fixed term, usually 12 months, at its renewal rates, or move you onto out-of-contract rates. Either way, you can lose months of savings in the most expensive part of the year. If it has already happened, check your contract for any window to leave a rollover, and ask your supplier for a written statement of the rates you are now paying.

Our view

The cheapest business energy renewal is usually the one started early. Put the end date in your diary, gather every meter and twelve months of usage, sort out VAT and levy paperwork, and compare total yearly cost rather than headline rates. For care homes, the 0% VAT on qualifying electricity until 31 March 2027 and the levy exemption can be worth thousands of pounds a year, but only if every supplier applies them from day one.

FAQ

When should I start renewing my business energy contract?

Ideally six months before the end date, and no later than the notice deadline in your contract. Starting early gives you time to gather usage data and compare quotes. If your supplier is about to roll you over, act straight away.

What happens if my business energy contract auto-renews?

Ofgem says a rollover is usually a new fixed term of 12 months and may be at a higher rate. Microbusinesses must receive renewal price information before the contract ends. Check your contract for any notice you need to give to avoid a rollover.

Is there a cooling-off period for business energy contracts?

No. Ofgem says there is no cooling-off period once you agree a business energy contract. Read the full terms, including exit fees and notice periods, before you agree.

Do care homes pay VAT on electricity this winter?

Not on qualifying supplies in Great Britain. HMRC’s Notice 701/19 sets a temporary 0% rate on qualifying electricity from 1 October 2026 to 31 March 2027, and care homes for the elderly or disabled count as qualifying use. Your supplier needs a VAT declaration for each meter.

What is the Climate Change Levy rate in 2026?

The main rate is 0.801p per kWh for both electricity and gas from 1 April 2026, rising to 0.827p from 1 April 2027, according to GOV.UK. Supplies for domestic use, including homes for the elderly and disabled, are excluded. Your supplier needs the right certificate to apply the exclusion.

Am I a microbusiness for energy?

You are if you have fewer than 10 employees and a turnover or balance sheet of no more than £2 million, or if you use up to 100,000 kWh of electricity or 293,000 kWh of gas a year. Microbusinesses get extra protections, including renewal price information before the contract ends.