Microbusiness energy rights UK October 2026: back bills, renewals, brokers and complaints

Last updated: Monday 5 October 2026 (Europe/London).
Next update: when Ofgem changes the protections for microbusiness or small business energy customers.
By: Switch Editorial Team, Switch Squid Ltd

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As of 5 October 2026, a UK business counts as a microbusiness for energy if it has fewer than 10 employees and turnover or a balance sheet of no more than about £2 million — or if it uses no more than 100,000 kWh of electricity or 293,000 kWh of gas a year — and that status gives it real rights: a 12-month limit on back bills, renewal prices before a fixed contract ends, clear broker cost information, and free access to the Energy Ombudsman. Business contracts have no cooling-off period, so knowing these rights before you sign or renew matters. Our quote buttons go to SwitchSquid’s own business energy service; we may be paid if you arrange a contract through it.

Sources: Ofgem — get a business energy contract, Ofgem — what to do if you get a back bill, Ofgem — third party intermediaries: what your microbusiness needs to know, Ofgem — microbusiness contract renewal factsheet and Energy Ombudsman — access extended to small businesses.

Are you a microbusiness? The Ofgem test

Energy protections in the business market depend on size, so the first job is to check which group you fall into. Ofgem says a business is a microbusiness if it meets either of these tests:

• Size test: fewer than 10 employees (or their full-time equivalent) and an annual turnover or balance sheet total of no more than £2 million. The licence wording uses €2 million; Ofgem’s consumer pages round it to £2 million.
• Usage test: it uses no more than 100,000 kWh of electricity a year, or no more than 293,000 kWh of gas a year. If you pass on usage, staff numbers do not matter.

That covers a lot of everyday businesses: a café, a hair salon, a corner shop, a small workshop, a two-person office. Many of them do not realise they qualify. Your yearly usage is on your bills or your supplier account; check both electricity and gas, because you may qualify on one fuel and not the other.

A second group, small businesses, gained some of the same protections from December 2024. Ofgem defines them as having fewer than 50 employees with turnover up to £6.5 million or a balance sheet up to £5 million, or using up to 200,000 kWh of electricity or 500,000 kWh of gas a year.

If you run your business from home, Ofgem notes you are probably on a domestic energy contract. In that case household rules apply, not the business rules in this guide.

Your main rights at a glance (checked 5 October 2026)

Right	What it means for you	Who it covers	Source
12-month back-billing limit	You do not have to pay for energy used more than 12 months ago if you were never correctly billed for it	Microbusinesses (and households)	Ofgem back-billing guidance
Renewal information before your fix ends	The renewal letter must show current prices, new prices and your yearly usage; Ofgem expects it around 60 days before the end date	Microbusinesses on fixed-term contracts	Ofgem renewal factsheet
Rollover limit	An automatic rollover cannot last more than 12 months	Microbusinesses	Ofgem business contracts page
Notice limits on evergreen contracts	Termination notice capped at 30 days; your request to leave acknowledged within 5 working days	Microbusinesses on evergreen contracts	Ofgem business contracts page
Broker cost disclosure	Broker costs added to your bill must be shown in the principal terms and given on request	All business customers	Ofgem guidance on intermediaries
Broker dispute scheme	Brokers paid by a supplier must belong to an approved dispute scheme	Micro and small businesses	Ofgem guidance on intermediaries
Energy Ombudsman	Free, independent decision on unresolved supplier complaints; non-domestic awards up to £20,000	Microbusinesses; small businesses since 19 December 2024	Energy Ombudsman
Cooling-off period	None — a contract agreed by phone is binding	All business customers	Ofgem guidance on intermediaries

Renewal notices: what your supplier must tell you

If you are a microbusiness on a fixed-term contract, your supplier has to send renewal information before the contract ends. Ofgem’s rules require the renewal letter to show your current prices, the new prices that would apply, and your annual consumption or a best estimate, so you can compare like for like. Ofgem expects that letter around 60 days before the fixed term ends.

Use that letter as your starting point, not your only option. Put the end date in your diary, compare the renewal price with other quotes, and decide well before the deadline. If you do nothing, you may roll onto a new term or out-of-contract rates, which Ofgem says are usually more expensive than a negotiated fixed contract. For microbusinesses, a rollover cannot run longer than 12 months.

Our guide to the business energy contract end date sets out a renewal timeline you can follow.

Back-billing: the 12-month limit

A back bill is a catch-up bill for energy you used but were not correctly charged for, often after months of estimated readings or a meter fault. Ofgem’s back-billing rules mean a microbusiness does not have to pay for energy used more than 12 months ago if it was never accurately billed for it, was not told about it in a statement of account, or had a Direct Debit set too low to cover it.

The protection does not apply if the business has acted unreasonably — for example by blocking access to the meter or ignoring payment requests. Ofgem has also told suppliers that a customer simply not sending meter readings does not cancel the limit. If you receive a large back bill, contact the supplier, say you are a microbusiness covered by the back-billing rules, and ask them to remove any charges older than 12 months. Ofgem says suppliers will refund any money taken in error.

The simplest way to avoid back bills is to send regular readings. A dated phone photo of each meter, taken monthly, gives you a clear record if a dispute ever comes up.

Brokers and intermediaries: what they must disclose

Many small businesses use a broker or comparison service, which Ofgem calls a third party intermediary. That can save time, because business prices are rarely published and suppliers quote case by case. It also means someone is being paid, and you are entitled to know how.

• Costs on the bill must be disclosed. If a broker’s fee is added to the price you pay the supplier, Ofgem says it must appear in the principal terms and be provided on request.
• Brokers paid by suppliers must be in a dispute scheme. Check the Energy Ombudsman broker register or the Utilities Intermediaries Association list before you go ahead.
• Ask the right questions. Ofgem suggests asking which suppliers will be approached, how many offers you will see, and how the broker is paid, directly or through your bill.
• You do not have to accept. Ofgem is clear you should never feel pressured, and that a broker is not required to find the cheapest deal in the market.

Our guide to business energy broker fees explains how commission appears in a quote and what to ask for in writing. SwitchSquid is itself an intermediary, so the same questions apply to us.

Complaints: from your supplier to the Energy Ombudsman

1. Complain to the supplier or broker first. Put it in writing, keep copies of bills and meter photos, and note the complaint reference.

2. Wait for a final response. If the problem is not sorted after eight weeks, or the supplier sends a deadlock letter saying it cannot do more, you can go further.

3. Take it to the Energy Ombudsman. The service is free and independent. Ofgem’s advice says microbusinesses should refer a case within 12 months of a deadlock letter. Since 19 December 2024, businesses with fewer than 50 employees can use it too, and the maximum award for non-domestic disputes with suppliers rose to £20,000.

4. Get free advice along the way. Citizens Advice helps micro and small businesses with energy problems; its consumer helpline is 0808 223 1133.

For a broker complaint, use the broker’s approved dispute scheme; your supplier should be able to tell you which scheme your broker belongs to.

Before you sign: a short checklist

• Confirm whether you qualify as a microbusiness or small business, and on which fuel.
• Note your contract end date and when the renewal letter should arrive.
• Get every quote with the same yearly usage, contract length and start date.
• Ask how any intermediary is paid and check it in the principal terms.
• Remember there is no cooling-off period — a phone agreement is binding.
• Keep dated meter readings every month.

Fit summary

Good for: cafés, salons, shops, workshops and small offices that want to know their rights before renewing or switching business energy.
Consider alternatives: larger businesses above the small business thresholds have fewer automatic protections and should rely more on contract terms and professional advice.
Not for: people running a business from a home on a domestic contract, where household energy rules apply instead.

Important conditions

• Rules summarised here come from Ofgem and Energy Ombudsman pages checked on 5 October 2026.
• Your contract’s principal terms set out the details that apply to you.
• Back-billing protection does not apply where a business has acted unreasonably.
• Business contracts have no cooling-off period.
• Quotes depend on your meters, usage, credit check and contract length.
• SwitchSquid may be paid if you arrange a contract through our business energy service.

Final decision card

Unsure of your status → check staff, turnover and yearly kWh against Ofgem’s microbusiness test.
Renewal letter arrived → compare it with fresh quotes now rather than letting it roll.
Large back bill → ask the supplier to remove charges older than 12 months, then complain if needed.
Dispute stuck for eight weeks → take it to the Energy Ombudsman.

FAQ

What counts as a microbusiness for energy in the UK?

Ofgem says a microbusiness has fewer than 10 employees and turnover or a balance sheet of no more than £2 million, or uses no more than 100,000 kWh of electricity or 293,000 kWh of gas a year. Meeting the usage test alone is enough.

Can a supplier back-bill my small business for more than 12 months?

Not if you are a microbusiness that was never correctly billed for that energy. Ofgem’s back-billing rules cap catch-up charges at 12 months unless the business acted unreasonably, such as blocking meter access.

When should I get my business energy renewal letter?

Ofgem expects suppliers to send microbusinesses a renewal letter around 60 days before a fixed-term contract ends. It must show current prices, new prices and your yearly usage.

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

No. Ofgem says there is no cooling-off period on business energy contracts, and a contract agreed over the phone is binding. Read the principal terms before you agree.

Does my broker have to tell me their commission?

If broker costs are added to the price on your bill, Ofgem says they must be shown in the principal terms and provided on request. Brokers paid by suppliers must also belong to an approved dispute scheme.

Can my small business complain to the Energy Ombudsman?

Yes, if you are a microbusiness, or a small business with fewer than 50 employees since 19 December 2024. Complain to the supplier first; you can go to the Ombudsman after eight weeks or once you get a deadlock letter.

How long can my business energy contract roll over for?

For microbusinesses, an automatic rollover cannot last more than 12 months. Comparing quotes before the end date is usually cheaper than rolling over or going onto out-of-contract rates.