Energy Icon - illustration of a light bulb and flame

What are deemed tariff rates?

If you’ve recently moved business premises and have started using gas and electricity without first agreeing on a contract with a supplier, you’ll be placed on a deemed rates contract. Deemed rates are usually higher than those offered on fixed rates, so it makes sense to switch to a fixed deal, as soon as possible. Give our energy experts a call on 0800 188 4930 to run a comparison today.

3 min read

An employer shows an employee something on a laptop behind the counter of her coffee shop

What is a deemed rate contract?

A deemed rate contract is put in place when you use energy without having negotiated a deal with your supplier. They are rolling contracts which last for 28 days, meaning that during each month without switching, your payments could increase. The good news is that you can cancel and switch to an agreed deal in just 28 days.

Regulations have been put in place to limit the amount of deemed energy contracts. These include your provider having to inform you of other available deals while making sure the terms of your deemed rate tariff are easily understood.

Even though providers are required by law to suggest alternate deals, around 10% of microbusinesses are currently on a deemed rate contract. This means it’s incredibly important to be proactive when it comes to energy, ensuring you know what type of contract you are on and when it ends.

If you do find out you are on a deemed rate tariff, there’s no need to worry. As mentioned, within 28 days you could have switched to a better deal. Unlike household energy, business energy needs to be switched via telephone rather than online. That’s because there is more to take into account compared to domestic policies.

By speaking to an expert on energy, you can quickly access the best deals without having to do any long-winded research. Simply provide information on your energy usage, business location and some other minor details from your last bill and we will compile a list of the best energy deals. A deemed rate contract is put in place when you use energy without having negotiated a deal with your supplier. They are rolling contracts which last for 28 days, meaning that during each month without switching, your payments could increase. The good news is that you can cancel and switch to an agreed deal in just 28 days.

Regulations have been put in place to limit the amount of deemed energy contracts. These include your provider having to inform you of other available deals while making sure the terms of your deemed rate tariff are easily understood.

What alternatives are there to deemed tariffs?

Even though deemed rate contracts are some of the most expensive energy tariffs, you’ll still want to ensure you are switching to the best deal, not just a better one. As all businesses are different, what is suitable for one may not be for another.

Our experts will talk you through the following contracts in more detail, but it’s worth knowing from the start what to expect. And it’s most important that you either avoid deemed rates altogether or switch as soon as you realise you are overpaying.

  • Fixed Rate Tariffs – The most stable and dependable contract, a fixed rate contract means you’ll know exactly how much you’ll pay for each kWh of energy you use. Of course, your electricity and gas bills will vary depending on how much you use, however they’re the best contract for budgeting purposes.
  • Variable Rate Tariffs– As the name suggests, these contracts involve fluctuating prices per every kWh of energy you use. The price is determined by the current energy market, including the wholesale price of energy. When the market is favourable, you’ll pay less. But when it isn’t, you’ll pay more.
  • Out-of-contract rates - If you let a fixed deal expire without arranging a new one, your supplier will place you on its out-of-contract rates. These are often more expensive than the rates you're offered on a fixed tariff, but you can switch at any time by giving just 28-days’ notice.
  • Rollover Contract – Similar to a deemed rate contract, except they last for one whole year. You’ll want to stay away from both rollover and deemed rate contracts as they feature much higher prices than fixed or variable tariffs.

How to switch from deemed contract energy

The most important thing to know about deemed contract energy is the fact you can switch at any time. To do this, you’ll need to speak with energy providers directly or use a broker like Uswitch for Business who will compare a wide range of energy providers from small and local right up to the big six, ensuring you have access to the best deals. To ring providers directly and weigh up the benefits of each can be time-consuming. That’s why we recommend speaking to one of our experts.

Talk to Uswitch for Business today to hear how we can help you find the best deal for your business. We’ll run a business electricity plan comparison and take care of all the details involved in switching.

What is a deemed rate contract?
What alternatives are there to deemed tariffs?
How to switch from deemed contract energy

Compare business energy suppliers with Uswitchforbusiness

Compare business energy prices and switch today

How Uswitch business energy comparison works

1

We find your details

Just enter your business address and we'll use industry data to accurately find and understand your energy usage.

2

We talk through your quotes

One of our UK-based experts will search our supplier panel and give you a call to talk you through the results on screen.

3

You choose the deal you want

With all the information to hand, you choose the deal that best suits your business and we'll handle the switch for you.

Your comparison is free.

If you decide to switch, we’ll be paid a commission by the new supplier that is included in the prices we quote.

Compare business energy suppliers with Uswitchforbusiness

Compare business energy prices and switch today

We’ll use smart data to find your current energy supplier and usage for you

Tooltip icon

Get to quote quicker

By clicking start quote you agree to give us permission to search industry held data to look up your current supplier and usage so we can provide accurate quotes without you having to find your old gas and electricity bills.

For more information on how we retieve and use your data take a look at our Terms and Conditions and Privacy Policy

Industry data
Compare Business Energy