How billing works
How's my bill calculated?
Your gas or electricity bill is made up of two elements:
- The standing charge – the fixed daily amount that covers the costs of transporting energy to your premises and maintaining your meter. It varies depending on where your business is based. You pay the standing charge no matter how much energy you use.
- The unit rate – the price you pay for the gas or electricity you use, usually measured in pence per kilowatt-hour (kWh). Depending on your meter, you might have different unit rates for electricity, such as day and night rates. One kWh is roughly what you need to use a desktop computer for four hours.
Your electricity meter will record your use in kilowatt-hours (kWh).
Your gas meter will record your use in cubic metres or cubic feet. This is then converted into kWh.
How much VAT am I paying?
The bottom portion of your bill tells you how much VAT you’re paying and the VAT rate that we’re charging you.
VAT is normally charged at the standard rate, currently 20%.
Businesses that meet the minimal use requirements are billed at a VAT rate of 5%.
- For electricity, this means using an average of less than 33 kWh per day (1,000 kWh per month)
- For gas, this means using an average of less than 145 kWh per day (4,397 kWh per month)
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