Microbusiness energy rules

Who counts as a microbusiness

Ofgem's guidance says that to qualify as a microbusiness you must have fewer than 10 employees and an annual turnover or balance sheet total of no more than 2 million pounds. You can also qualify on energy use alone: up to 100,000 kWh a year of electricity, or up to 293,000 kWh a year of gas.

So a business with more staff can still be a microbusiness for energy purposes if its consumption is within those limits, and a very small firm qualifies on headcount and turnover even if it uses more. Ofgem notes that some suppliers may use either business size or annual consumption when deciding which contract or protections apply, so tell your supplier if you think you qualify.

For comparison, Ofgem defines a small business as one with 11 to 50 employees and turnover up to 6.5 million pounds or a balance sheet of no more than 5 million pounds, or using up to 200,000 kWh of electricity or 500,000 kWh of gas a year. Ofgem says small businesses, like microbusinesses, can get support from Citizens Advice and help from the Energy Ombudsman with unresolved supplier complaints; the contract protections below are the ones Ofgem lists for microbusinesses. Our small business energy comparison page covers comparing contracts at both sizes.

Checking whether you qualify

1. Count your employees and check your latest turnover and balance sheet total against Ofgem's thresholds.
2. Add up your annual consumption from your bills for each fuel: up to 100,000 kWh of electricity or 293,000 kWh of gas a year qualifies on its own.
3. Tell your supplier, or the broker arranging your contract, if you think you are a microbusiness, because suppliers may use either test.
4. Check the contract information you receive: as a microbusiness it should set out the key terms clearly, including the broker costs in the principal terms.

The extra protections microbusinesses get

Ofgem says that if you are a microbusiness, your energy supplier must:

• provide clear information about your contract, so you can see the key terms before and after you agree
• limit termination notice periods to 30 days (evergreen contracts only)
• acknowledge requests to end a contract within 5 working days (evergreen contracts only)
• provide information about renewal prices before your contract ends, so you can compare before the term runs out

Ofgem's Microbusiness Strategic Review added further licence rules from 1 October 2022. Two matter most day to day: suppliers must show brokerage costs in the contract's principal terms, and they can no longer require a microbusiness to give notice of its intention to switch, except on evergreen contracts.

What these rules do not do is let you change your mind after agreeing a contract. Ofgem consulted on a cooling-off period for microbusinesses and decided in 2022 not to introduce one at that time, and its current guidance says there is no cooling-off period after you agree a contract. See is there a business energy cooling off period?

Microbusiness energy rules at a glance

Rules change, and some planned measures for small businesses depended on a new legal definition. Check Ofgem's current guidance for anything that matters to a specific decision.

Broker costs and the dispute resolution rule

Ofgem's rules reach energy brokers through the suppliers they work with:

• Broker costs must be visible. Since 1 October 2022, microbusiness contracts must show brokerage costs in the principal terms. Ofgem extended this to all non-domestic customers for contracts signed on and from 1 October 2024, and suppliers must make the information available on request.
• Brokers must be in a redress scheme. From 1 December 2022, suppliers may only work with brokers that are members of a qualifying dispute resolution scheme when arranging microbusiness contracts. Ofgem's guidance says that if your broker is paid by a supplier, it must be a member of an approved redress scheme, and suggests checking the Energy Ombudsman broker register or the Utilities Intermediaries Association accredited member list.

Forever Communications works as an agent of Fidelity Energy. Fidelity Energy is the broker that arranges your contract, and it is on the Energy Ombudsman's broker register. Fidelity Energy is normally paid commission by the supplier you choose, included in your unit rates and/or standing charge, and Forever Communications receives a share of that payment. The estimate appears in your contract documents; our energy broker fees page explains how it is worked out, and our energy broker ombudsman page explains how to check a broker and complain.

Back billing and other protections

Ofgem's back-billing rules apply to households and microbusinesses. They mean you do not have to pay for energy used more than 12 months ago if you have not had an accurate bill for it before, you have not been told what you needed to pay through a statement of account, or your Direct Debit was previously set too low. The protection does not apply if you acted unreasonably, for example by blocking access to your meter, ignoring payment requests or stealing energy. Contact your supplier straight away if you think it has not followed the rules.

The Standards of Conduct, Ofgem's rules on treating customers fairly, applied to microbusinesses first and were extended to businesses of all sizes from 1 July 2024. Ofgem also introduced a licence rule requiring suppliers to signpost microbusinesses to Citizens Advice (and Citizens Advice Scotland) for support.

Where microbusinesses can get help

1. Complain to your supplier (or broker) first, in writing, keeping copies of bills, contracts and correspondence.
2. Get advice from Citizens Advice. Ofgem says microbusinesses and small businesses can get support with their energy contracts from Citizens Advice.
3. Escalate to the Energy Ombudsman if the complaint is not resolved. Ofgem says micro and small businesses can get help with unresolved supplier complaints from the Energy Ombudsman.

How a complaint about the broker service works through Fidelity Energy is set out on our energy broker ombudsman page. This page is general information, not legal advice.

How we help microbusinesses compare energy

Microbusinesses often have the least time to manage energy and the most to lose from missing a renewal. We help you gather your bills and contract end date, Fidelity Energy prices your supplies across its panel of 24+ suppliers (its own figure; not every supplier in the market), and we help you read the quotes, the principal terms and the broker costs before you agree. You can also see what to have ready on our business energy quotes page.

Contact us with a recent bill and your contract end date, and we can arrange quotes.