Fixed Tariff at home (using my business) - what options now?

Siggles

I used a broker that, in previous years, has helped me get good deals using my limited business which is registered at my home address.

At the end of July I signed a micro business energy contract with Positive Energy (through the broker) at 42p kwh and 47p standing charge, for 4 years. This contract starts on the 1st October, although signed etc end of July. The cooling period has of course passed. Had the government not intervened and the cap changes gone ahead as originally thought, no doubt this would have been a great contract. But not now. Hindsight is a wonderful thing. I should have trusted my instinct and I always thought 4 years was too long but trusted the broker and his advice.

I asked about cancelling and they have said I would need to be in excess of £3,000. I'm still waiting to hear if anything else can be done, but I doubt it.

Do I have any other recourse? Will they be made to lower the kwh that is stated in the contract to match the cap? Ive also noted that the broker's logo (ie, a separate company from the energy company) is displayed on the Energy company's website, so the two companies are linked somehow, which is in itself a bit dodgy? So the broker's advice could be argued  is not partial. Mis-sold?

Thanks for your help.

Neil_Jones

Firstly you woudn't have had a cooling off period as the luxuries/protections of domestic energy does not apply to businesses.

Second of all as things stand the energy cap/price protection does not apply to businesses.  And 3k to cancel for four years, is the equivalent of £62.50 a month.  Details may follow in due course about business though protection/cap-wise.

Business energy is a different kettle of fish in every way shape or form, its almost always broker lead.

[Deleted User]

Will they be made to reduce the price of a business energy contract to match the domestic price cap?  Unlikely.

Have you been mis-sold because you have buyer's remorse in hindsight and a change has happened that the broker had no reason to be able to predict?  Unlikely.

You made a risk-based decision from the information available at the time.  That's nobody's fault, and as you said it was a good decision at that time.

Having said that, we don't know what support is going to be made available for businesses yet, they might do exactly the same thing.

wittynamegoeshere

Do nothing.  Wait and see what actually gets announced, this hasn't yet happened, but should within the next couple of weeks.  The limits on domestic tariffs all apply to existing contracts, so there's no reason to think the same logic won't be applied to business contracts, I believe they have said the same or similar limits will apply.

Presumably they'd prefer to take £3000 from you instead of not taking it, but it may well be that they're not allowed to once the terms are announced, but as that hasn't yet happened they're entitled to hold you to the contract if they want to.

MWT

Siggles said:

Ive also noted that the broker's logo (ie, a separate company from the energy company) is displayed on the Energy company's website, so the two companies are linked somehow, which is in itself a bit dodgy? So the broker's advice could be argued  is not partial. Mis-sold?

You are a business for the purposes of this contract so you are considered to be competent to assess the information they provide and make your own decisions, you give up all the usual protections afforded to consumers when you elect to trade as a business.

wittynamegoeshere

[Deleted User] said:

Will they be made to reduce the price of a business energy contract to match the domestic price cap?  Unlikely.

Unless I'm mistaken, I believe that this has been announced.  I think it was even stated that the tariffs would be equal to domestic, which would be something of a treat for business.  But there are lots of conflicting reports kicking about, probably evidence of them making it up as they go along.

Business energy is definitely being looked at, the only difference I've seen stated is that it would be for 6 months rather than 2 years.

What I'd be interested in hearing about (unless it's private) is why use a business tariff if working from home?  There are now millions working from home in all kinds of ways, almost all on their home's standard domestic tariff.  I don't believe there's anything wrong with doing this.

I believe the answer is to not panic and see what happens.  There should be a solution for those locked into contracts, just as we understand will be the case for domestic customers.

[Deleted User]

"A new 6 month scheme for businesses and other non-domestic energy users (including charities and public sector organisations like schools) will be offered support as is being provided for consumers."

That's the only official word so far - I don't read that as offering the same tariffs, just that there will be support in some form.

wittynamegoeshere

That depends on how you interpret the phrase "as is".  It could mean just the same.  Unlikely I know, but not impossible.

There really isn't a fundamental reason why business should pay more for the same stuff.  Perhaps it could be seen as an antidote to the gathering clouds of recession?

But the answer is probably that nobody at all yet knows, not even those whose job is to decide.  They're making it all up as they go along, announcing the odd thing, waiting to see who screams loudest then modifying accordingly.

Definitely do not pay £3000 while everything's up in the air.

Siggles

Thank you everyone for your help and advice. I received an email today to say the contract is cancelled, without charge. I am relieved, especially after reading about about Positive Energy. It also means, as well as now getting the cap, I will get the £400 which I wouldnt have got with a commercial contract.

I used my business as it got me good rates in previous years and before now the broker has given sound advice and saved me a lot of money. But I'm not sure now I'll go down that route again for a while.

Robin9

Siggles said:

Thank you everyone for your help and advice. I received an email today to say the contract is cancelled, without charge. I am relieved, especially after reading about about Positive Energy. It also means, as well as now getting the cap, I will get the £400 which I wouldnt have got with a commercial contract.

I used my business as it got me good rates in previous years and before now the broker has given sound advice and saved me a lot of money. But I'm not sure now I'll go down that route again for a while.

How have you managed to get your account converted to domestic ?  There have been several threads finding it very difficult.

macman

Why would you even do this, given that you were paying 20% VAT on a business account vs 5% on a residential account?
Does your business involve the use of a high level of electricity?