Last updated: Sunday 13 September 2026 (Europe/London).
Next update: when WeSave or Ofgem reprint non-domestic guidance I can re-cite, or when we verify a supplier’s own published deemed schedule same-day.
By: Switch Editorial Team, Switch Squid Ltd
Deemed business electricity rates in the UK are the default prices a licensed supplier charges when your SME takes supply without a signed contract — typically after a change of tenancy or a lapsed fixed deal — and they are not protected by the domestic Ofgem price cap. There is no £1,723-style household ceiling for most non-domestic sites. The practical move is the same every time: identify the supplier, read whether the bill says deemed or out-of-contract, then switch onto a negotiated fixed or flexible contract as fast as the Change of Tenancy / switch timeline allows. Use the business energy hub to start that compare.
I am Switch. This page explains deemed business electricity rates UK without inventing a 25-supplier pence table I have not opened on each supplier’s own deemed PDF today. Where I quote numbers, they are WeSave’s September 2026 contracted market averages — the benchmark you are trying to get back to — plus Ofgem’s rules of the road for non-domestic customers.
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Deemed vs out-of-contract — close cousins
| Term | When it applies | Exit shape |
|---|---|---|
| Deemed contract | You take supply with no signed contract (classic move-in / COT) | Usually leave by switching or signing a negotiated deal; no domestic-style ETF theatre |
| Out-of-contract | A fixed contract ended and nothing new was signed | Often similar punitive rates; check notice wording on the old contract |
Commercially, both feel like “expensive default”. Legally they are not identical. Your bill and welcome pack should say which one you are on. Ofgem’s Standard Licence Condition 7A expects suppliers to take reasonable steps to tell non-domestic customers they are on deemed or out-of-contract terms, what rates apply, and that they can switch or negotiate.
Why deemed rates hurt
Suppliers price deemed supply for credit risk and uncertainty. They do not know how long you will stay, how you will pay, or what your volume will be. The unit rate and standing charge are therefore set uncomfortably high compared with a credit-checked 12- or 24-month fixed contract for the same MPAN. Industry explainers routinely describe deemed/out-of-contract electricity as tens of percent above negotiated fixed prices — sometimes more. I am not going to paste an unverified “32–45p/kWh for every supplier” grid from a third-party blog as if it were a primary schedule.
What I can cite same-day is WeSave’s September 2026 guide to contracted business electricity averages (the market you want to rejoin):
| Band (annual use) | Avg contracted unit rate | Avg standing charge |
|---|---|---|
| Micro 0–4,999 kWh | 27.20p/kWh | 79.61p/day |
| Small 5,000–14,999 kWh | 26.90p/kWh | 87.83p/day |
| Medium 15,000–24,999 kWh | 26.88p/kWh | 93.03p/day |
| Large 25,000–49,999 kWh | 26.96p/kWh | 147.91p/day |
Source: WeSave “Business Energy Prices September 2026” guide, fetched 13 September 2026. These are broker-market averages for contracted supply, not deemed tariffs. If your deemed bill’s unit rate sits materially above the band that matches your kWh, you are looking at the penalty you are trying to escape.
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No domestic price cap for most SMEs
The Ofgem domestic price cap (the £1,723 dual-fuel Direct Debit typical figure for Oct–Dec 2026) does not cap ordinary business electricity. Microbusinesses have specific protections and information rules, but they do not get a household-style absolute pence cap on deemed rates. That is why inertia is expensive: the supplier can keep billing the default until you act.
Change of tenancy — the usual trap
When you move into a commercial unit, the previous tenant’s contract does not automatically become yours. You complete a Change of Tenancy with the incumbent supplier, who will usually put you on deemed terms until a new contract starts. Practical checklist:
- Photograph the opening meter read on day one and send it to the supplier.
- Complete COT in their name / your company details promptly.
- Ask for the deemed schedule in writing (unit rate + standing charge).
- Parallel-path a Letter of Authority if you use a broker, and collect fixed quotes.
- Switch or sign a negotiated deal — do not “wait and see” for three months.
Switches often take in the order of weeks, not hours. You may pay deemed rates in the gap. Speed still matters: every week on deemed is a week you are not on the WeSave-style contracted averages above.
How to tell you are on deemed rates
- Bill or portal says “deemed”, “out of contract”, “default”, or “variable business rates”.
- You never signed a contract for this MPAN in your company’s name.
- Your fixed end date passed and nothing renewed.
- Unit rate looks punitively high versus a fresh fixed quote for your usage band.
If unclear, call the supplier and ask for the contract status and the published deemed schedule. Keep a written note of the date and the pence they quote.
Start a business energy compare →
Leaving deemed supply
Deemed arrangements are designed to be leavable. Typical path:
- Get your MPAN, annual kWh, meter type (NHH vs HH), and current rates.
- Compare contracted business electricity quotes via the business energy hub or a regulated broker with a clear Letter of Authority.
- Sign a contract; track the switch date.
- Keep paying the deemed bills in the interim — unpaid deemed debt becomes a credit problem on the new contract.
Half-hourly metered sites and high-consumption MPANs need more than a microbusiness web quote — say so up front so you are not sold a domestic-shaped product.
Microbusiness protections — read them, still switch
Ofgem treats microbusinesses differently from large industrial sites. Information remedies, cooling-off nuances on some contracts, and clearer statements of principal terms exist in the non-domestic rulebook. None of that turns a deemed schedule into a cheap fixed deal. Use the protections to understand what you signed — or did not sign — then still move onto contracted rates in the WeSave average neighbourhood for your band.
If a salesperson pressures you into a multi-year business contract with opaque uplift clauses while you are panicking about deemed rates, pause. Get at least two quotes. A bad fixed deal can be harder to leave than deemed supply.
Brokers, LOAs and commission honesty
Letters of Authority are normal in SME energy. A good broker will show the supplier offers, disclose how they are paid, and not hide evergreen rollover terms. A bad broker will bury a high standing charge in a “low unit rate” pitch. When you compare via SwitchSquid’s business energy hub, keep the same discipline: total annual cost at your kWh, not a single sexy pence figure.
For half-hourly (HH) meters, capacity charges, available supply capacity (kVA) and reactive power can dwarf the unit-rate conversation. Deemed HH sites need an HH-capable quote, not a microbusiness web form that assumes a plain NHH profile.
What I will not do on this page
- Invent a league table of 25 suppliers’ deemed pence from a secondary blog.
- Pretend business electricity has a £1,723 domestic cap.
- Promise a percentage saving without your bill in hand.
- Confuse green certificates, CCL, and nuclear RAB levies with the deemed unit rate — those line items are separate.
Worked sense-check (methodology, not a quote)
Suppose a small site uses 12,000 kWh/year. WeSave’s small-business contracted average in the September 2026 guide is 26.90p/kWh + 87.83p/day. That illustration is roughly 12,000 × 0.2690 = £3,228 on units, plus about £320 on standing charges (87.83p × 365), before VAT and other levies — around £3,550 as a contracted ballpark. If your deemed unit rate is several pence higher and the standing charge is inflated, the annual gap is measured in hundreds to thousands of pounds. Rebuild the maths with your deemed pence from the supplier letter, not with a national myth.
FAQ
What are deemed business electricity rates UK?
They are the default rates a supplier charges when your business takes electricity without a signed contract — common after move-in or when a fixed deal lapses. They are usually much higher than a negotiated fixed contract.
Is there an Ofgem price cap on deemed business rates?
Not in the domestic £1,723 sense. Non-domestic supply has different protections; deemed rates remain supplier-set defaults you should leave promptly.
How fast can I leave a deemed contract?
Often you can start a switch immediately; completion commonly takes weeks. There is typically no exit fee on deemed terms, but confirm with the supplier.
Deemed vs out-of-contract — which is worse?
Both are expensive defaults. Deemed usually means no prior contract; out-of-contract means a fixed term ended. Check your paperwork for notice rules.
What contracted rates look like in September 2026?
WeSave’s guide shows small-business contracted averages around 26.90p/kWh with 87.83p/day standing charges — a benchmark, not your quote.
What should I do this week if I suspect deemed rates?
Photograph the meter, confirm status with the supplier, and start a compare on switchsquid.com/business-energy/.
Do I need a Letter of Authority?
If a broker shops the market for you, yes — LOA lets them request rates in your name. Read it before you sign.
