Energy for pubs, restaurants and hotels

Why hospitality energy is different

Hospitality businesses tend to have a combination of energy needs that few other sectors share:

• Long and late hours. Bars, restaurants and hotels use energy into the evening and at weekends, so more consumption falls outside a standard working day
• Gas and electricity together. Commercial kitchens, heating, hot water, refrigeration, cellar cooling and lighting mean most sites buy both fuels
• Living accommodation. Many pubs and some restaurants have a flat for the licensee, manager or staff on the same supply
• Premises that change hands. Leases, tenancies and freehold sales mean new operators often inherit a supply with no contract in place
• Groups with many sites. Multi-site operators can have a different contract end date for every site

None of these needs a special tariff. They change which quotes are genuinely comparable and when you should be looking. For explanations of tariffs, standing charges and meter types, our sister site Business Gas and Electric covers the product side; this page is about comparing and buying.

VAT for pubs, restaurants and hotels

VAT is where hospitality differs most from other businesses, and it is easy to get wrong on a mixed-use site.

HMRC's guidance on fuel and power (VAT Notice 701/19) says supplies are standard-rated unless they are for qualifying use, which includes domestic use in dwellings. But HMRC also says that hotels, inns and similar establishments are not residential accommodation for fuel and power purposes, and that fuel and power supplied to them is standard-rated. Guest bedrooms do not make a hotel's supply domestic.

Where part of the premises is genuinely used as living accommodation, such as a flat for the proprietor or staff, the mixed-use rule applies:

For a mixed supply, HMRC says the supplier should obtain a certificate from you stating the exact percentage of qualifying use at the premises, signed by a responsible person, and that you must tell the supplier if it changes. Suppliers make reasonable checks and an incorrect certificate may lead to a penalty, so base it on real figures and take advice if you are unsure.

The temporary zero rate on qualifying electricity in Great Britain only reaches the qualifying share of a supply; electricity for the trading areas stays at the standard rate, gas is not included, and Northern Ireland stays at 5%. Hospitality businesses are in the commercial sector, so the Climate Change Levy main rates normally apply. Our VAT and Climate Change Levy guide covers both taxes in full.

Taking on a pub, restaurant or hotel

Hospitality premises change hands often, and energy is one of the easiest things to overlook in a move. Ofgem's change of tenancy and switching guidance sets out these steps:

1. Tell the current supplier as soon as you can that you are moving in, even if you are already talking to other suppliers. If you are changing supplier, tell both the current and the new supplier.
2. Give a meter reading for each electricity and gas meter if you can.
3. Send evidence of the change when the supplier asks, such as a tenancy or lease agreement, sale documents or title deeds. Ofgem says a supplier you are staying with will review it within 10 working days.
4. Agree a contract. You are responsible for the energy you use before a new contract starts, and you may be on a deemed contract, whose rates Ofgem says are usually higher than negotiated contract rates.

You do not have to stay with the incoming supplier. Ofgem says you can switch from a deemed contract at any time, so you can compare straight away. If you are taking on several premises at once, give each one its own reading and evidence. See change of tenancy and deemed rates for the detail.

Timing renewals around your trading year

Plan to compare when your switching window opens, which Ofgem says is a few months before a fixed contract ends. For hospitality, a few practical points help:

• Diary the end date and switching window for every supply, not just the main site
• Avoid leaving quotes to the busiest weeks of your trading year, when nobody has time to read terms
• Ask what happens if you do nothing: rollover onto a new fixed term (Ofgem says usually 12 months) or out-of-contract rates
• If you expect to sell, re-let or close a site, check exit and change-of-occupier terms before you agree a long contract
• Have recent bills ready for each supply so quotes are based on real consumption

Our business energy contract renewal guide explains the renewal window in detail, and out-of-contract rates covers what happens if a contract ends without a new agreement.

Pub groups, restaurant chains and hotel groups

Multi-site operators have two extra questions: how to manage many end dates, and whether to fix or buy flexibly.

Aligning end dates. When each site has a different end date, renewals become a rolling job and some sites end up on out-of-contract rates. Bringing sites onto aligned dates over time can make renewals easier to manage. We can help you map every supply and its end date and put them into one quote request.

Fixed or flexible buying. Ofgem describes flexible (or structured) contracts, which let companies buy energy in smaller portions rather than locking into one price, as suitable for large businesses that use a lot of energy. Fidelity Energy offers flexible procurement run by its in-house traders, alongside fixed contracts, and says you can convert to fixed at any point. Ofgem says a fixed-rate contract keeps the unit rate and standing charge the same for the contract length; flexible buying leaves more of the price to the wholesale market. See fixed vs flexible business energy.

Larger sites. Larger hotels and venues may have half-hourly settled electricity, where the shape of your consumption through the day matters to the price. See half-hourly business electricity. Fidelity Energy also offers bill validation and its Etainabl energy management platform, which it says shows consumption, cost and carbon for every site in one place.

How Forever Communications helps hospitality businesses

Forever Communications works as an agent of Fidelity Energy, an independent business energy broker that says it works with a network of 24+ suppliers, so your comparison covers that panel. We collect your bills, end dates and details of any living accommodation; Fidelity Energy prices your supplies across its panel; and we help you understand the options, the commission and the contract terms before you decide.

Commission and fees. Fidelity Energy is normally paid commission by the supplier you choose. Under its terms, the commission is added to your unit rate and/or daily standing charge, and the estimated total is set out in your contract documents; Ofgem also requires broker fees to be shown in the principal terms of non-domestic contracts signed on and from 1 October 2024. You can instead ask at the start to pay Fidelity Energy by direct invoice, and its terms set out when a contract cancellation fee applies. Forever Communications is paid by Fidelity Energy out of the commission Fidelity Energy receives from suppliers. See energy broker fees.

Dispute resolution. Fidelity Energy is listed on the Energy Ombudsman's register of energy brokers, with membership active since 1 December 2022 (we checked on 1 November 2026). Our energy broker ombudsman page explains how to check the register and how complaints work.

There is no cooling-off period once you agree, so read is there a cooling-off period for business energy contracts? first.

Forever Group also supplies business phone lines, business mobiles and connectivity, which can help when you are opening or taking over a site. Contact us with a recent bill for each supply.