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Understanding your business gas bill
Business gas bills can be surprisingly complex. Even for the smallest companies, monthly bills can stretch across several pages, filled with detailed calculations.
Understanding how your bill is structured is essential, not just for managing costs, but also for confidently comparing business energy prices and securing the best deals.
In this guide, we break down business gas bills section by section, explain the key calculations, and help you take control of your energy costs.
What’s included in your business gas bill?
This section explains the three key sections included on the first page of business gas bills, highlighting the important details for each.
Site and account details
Business gas bills are always associated with an individual business gas connection. Your bill will indicate:
- The property address where your gas is supplied
- The MPRN unique identifier associated with the gas connection
- The business gas meter ID
- The legal name of the company occupying the property (who is responsible for paying the bill)
💡 In a deemed energy contract, the bill may be addressed to the “Current Occupier” if the supplier does not know which business occupies the property.
Tariff information
Most business gas bills display the details of your current contract with your supplier. The regulator Ofgem mandates that this information must be shown for all small business energy customers:
- Tariff name – The type of gas tariff agreed with your supplier, usually stated as “deemed”, “default”, “variable”, or “fixed”.
- Contract end date – The date on which the fixed tariff ends.
- Estimated annual gas consumption – The gas consumption figure your supplier will use to estimate your bill if they have not received meter readings.
- Billing period – The date range over which the business gas charges are calculated in the current bill.
Summary of your charges and balance due
The first page of a business gas bill will include a summary of the charges incurred and the total amount due to your supplier.
The total amount due on a business gas bill is the sum of:
- Business gas charges during the billing period – The total of unit charges, standing charges, and taxes during the billing period. See more below on how these are calculated.
- Outstanding balance from previous periods – The balance of any unpaid bills or credits received relating to previous months.
The bill will then state how the total amount due should be paid. Small businesses typically pay automatically via direct debit.
Business gas bill charges
Each business gas bill calculates the charges incurred during the billing period, usually on the second page of the invoice.
This section explains each element of business gas charges, showing how they are calculated.
Meter readings and gas usage
Gas connections at commercial properties are generally equipped with a gas meter to measure consumption.
A business gas bill will state the gas meter readings at the start and end of the billing period. These are either:
- Actual readings – Where you have submitted a meter reading to your supplier or where a smart meter automatically provides the readings.
- Estimated readings – Where your supplier estimates your readings in the absence of actual meter readings.
Gas usage during the billing period is calculated as the difference between the end and start meter readings, measured in cubic metres or cubic feet of gas.
Gas usage conversion
All business gas suppliers define their tariffs in terms of cost per kWh rather than in volumetric measurements (cubic metres or feet), as measured by a meter.
All bills include a conversion calculation to translate your meter readings into kWh. The calculations are standardised across the industry as follows:
Cubic metre usage conversion to kWh:
Cubic feet usage conversion to kWh:
Unit rate charges
All business gas tariffs include unit rate charges for each kWh of gas consumed during the contract.
Each bill will calculate your unit rate charges as follows:
Unit charge in your business gas tariff (p/kWh)
The unit rates on business gas bills cover the cost of purchasing gas on the wholesale market from producers in the North Sea and importers.
💡 Use our business gas comparison service to find the lowest fixed unit rates currently available in the market.
Standing charge
Most business gas tariffs include a daily standing charge. It is calculated on business gas bills as follows:
The number of days in the billing period
Business gas standing charges pay for the following fixed costs:
- Gas transportation and distribution – Business gas suppliers incur gas distribution costs for connecting their customers to the national gas grid.
- Metering charges – Covering the costs associated with renting, maintaining, and arranging readings from business gas meters.
- Supplier margin – An additional margin to cover the operational costs of being a business energy supplier, such as providing a customer service function.
Climate Change Levy (CCL)
The Climate Change Levy is a government tax paid for each kWh of gas consumed. Since 1 April 2025, the Climate Change Levy for gas is 0.775 p/kWh.
💡 Microbusinesses and charities are exempt from the Climate Change Levy on gas bills.
VAT on business gas
VAT is a consumption tax that the UK government levies on the value of goods and services sold. Most businesses pay 20% VAT on top of the three charges above.
Microbusinesses and charities pay VAT on business gas bills at the reduced rate of 5%. For more information, see our guide on VAT for business energy bills.
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