Deemed rates can apply when your business uses gas or electricity without agreeing a supply contract, commonly after moving into premises. They are usually higher than negotiated rates. This guide helps businesses in Great Britain identify their arrangements, check the bill and compare their next options. Do not assume that every expired contract becomes a deemed contract.
What puts a business on deemed rates?
An energy supply may already be connected when you collect the keys to a shop, office or industrial unit. That does not establish which prices your business will pay. Ofgem explains that a deemed contract arises automatically when you move into premises without arranging a formal contract, and that deemed rates are usually higher than negotiated contract rates.
Not having signed a new agreement does not mean energy is free. Contact the existing supplier, explain when your business became responsible and ask for the account details and applicable terms. Keep the electricity and gas records separate: the suppliers and arrangements may differ.
Before occupation, use our moving-premises guide to organise the handover. If you have already moved in, record the information you have now and identify any gaps rather than guessing an opening reading or date.
Are deemed and out-of-contract rates the same?
They are different arrangements, even though both may cost more than a negotiated deal. Ofgem distinguishes deemed contracts from out-of-contract rates, which can arise under the terms of an earlier contract after its fixed period ends.
If a previous agreement has ended, ask the supplier which terms now apply and where the continuation arrangements were stated. Look for the contract confirmation, renewal correspondence and terms, rather than deciding from the invoice's price alone.
| Situation | What to establish |
|---|---|
| You have just taken responsibility for premises | Who supplies each meter, when responsibility changed and whether a contract has been agreed for your business. |
| Your fixed period has ended | What the earlier contract says happens next, and which rates and terms are now being applied. |
| Someone says a new deal is already agreed | Request the agreement, acceptance evidence, supply details and start date before making another commitment. |
The word “deemed” describes the supply arrangement here. An estimated meter reading is a separate billing issue; check readings as well as the contract type.
What should you check on the current bill?
Gather a short evidence pack before requesting prices or disputing a charge:
- The business name, supply address and date your responsibility began.
- The electricity meter point administration number (MPAN), gas meter point reference number (MPRN) and relevant meter serial numbers.
- Opening and current readings, with dated photographs where safely accessible.
- The unit rates, standing charges and dates for which they apply.
- Any contract confirmation, renewal notice or earlier supplier correspondence.
- Any query already raised, including its reference and the supplier's reply.
Ask for the applicable rate schedule and effective dates. Reconcile the invoice period with the occupancy evidence, particularly if a bill includes time before your business took over. Our bill-checking guide sets out the wider checks.
A high charge is a reason to investigate, rather than proof that the supplier has made an error. Separate a disputed date, reading or calculation from the question of which arrangement to choose next.
How can you move to another arrangement?
Request an offer from the existing supplier and compare alternatives using consistent consumption figures and proposed start dates. Ofgem's switching guidance explains that businesses on deemed contracts can switch supplier at any time. A deemed contract must not impose a fixed term, termination fee or notice requirement before changing supplier.
For non-domestic deemed contracts, debt alone is not a permitted basis for blocking a supplier transfer. Outstanding charges still need to be paid or resolved separately. Ofgem explains this distinction in the customer-transfer section of its June 2026 consultation, referring to the existing licence conditions; the proposed guidance should not be confused with a final consultation decision.
If the transfer is challenged, ask for the reason and applicable basis in writing, and use the supplier's complaints process if the objection appears incorrect. Obtain the confirmed start date and check which rates cover the period before it: requesting a quotation does not immediately start a new price.
Compare the whole offer: consumption charges, standing charges, other costs, broker remuneration, duration and payment terms. BBA Energy's procurement and renewal support can help organise that comparison. A lower unit rate alone is not enough to assess the arrangement.
Check the change has actually taken effect
Keep the accepted offer and supplier confirmation together. Check that the first bill under the new arrangement uses the agreed start date, prices and supply identifiers. Retain the final bill from the previous arrangement and query any overlap or unexplained balance.
Do not assume that a later agreement automatically changes earlier deemed charges. If a retrospective adjustment is discussed, ask the supplier to confirm its scope and dates in writing. Add the new contract's end date and any notice requirements to your renewal checklist, so the next decision is planned rather than discovered on a bill.