Can you get out of a business energy contract early?

Can you leave a fixed business energy contract early?

Usually only if your contract allows it or you pay to leave. Ofgem says most suppliers won't let you switch before the end of your contract unless you've already agreed a termination clause, or you pay an exit fee. Fixed business contracts can last several years, so that can be a long time to wait.

Your supplier can also stop a switch going through. Ofgem says a supplier may object to your switch, for example if you owe it money. Ofgem said in June 2026 that, under the current licence, a supplier can't object to a deemed customer's switch because of debt. Otherwise, a supplier can object only under a term of your contract. When Ofgem looked at this in 2016, being in a fixed-term contract was the most common reason for an objection.

Before you agree a new contract elsewhere, check your current one for:

• the end date, and any switching window before it;
• any termination clause that lets you leave early;
• any exit fee, and how it's worked out.

Ofgem says fixed-rate contracts include a switching window, which opens a few months before the end, when you can sometimes switch without paying a fee.

How exit fees work

Exit fees are set out in your contract terms, so the amount depends on your supplier, your contract and how long is left on it.

As an example, EDF's small business terms say that if your contract ends before the end of its fixed term, you pay an early termination fee with two parts. One is an energy part, based on how market prices have moved since your contract started and the energy you'd still have used, which can be zero. The other is a fixed cost part: a percentage of what you'd have paid in unit rates and daily charges for the rest of the contract, which is 5% if you agreed your contract directly with EDF, or 10% if you came through a broker. EDF says it may object to a switch while the fee is unpaid.

Octopus, for its business Shape Shifters tariff, says there might be an exit fee partway through the contract, and none once it has finished.

If you're thinking of leaving early, ask your supplier for the exact fee in writing first, so you can compare it with what you'd pay elsewhere.

Is there a cooling-off period for business energy contracts?

No. Ofgem says there's no cooling-off period after you agree a business energy contract, even when you agree it over the phone rather than in writing, and that a verbal agreement is binding.

The cooling-off rights you might know from buying things as a consumer don't help here either. They come from the Consumer Contracts Regulations 2013, which only cover individuals acting wholly or mainly outside their business.

Ofgem has looked at this. In 2022, it decided not to bring in a cooling-off period for microbusinesses "at this time", and in 2024 it said it was still analysing the size of the problem. We haven't found any change since.

Citizens Advice notes that most business energy suppliers don't offer a cooling-off period of their own, but that it's worth checking your terms in case yours does.

Can you cancel a business energy contract before it starts?

Not as a right. Ofgem says there's no cooling-off period once you've agreed a contract, and we haven't found any rule that lets a business cancel before the supply starts. Citizens Advice warns that if you change your mind, you might have to pay a termination fee. Because a phone agreement is binding, take your time before you say yes, and ask for the contract terms in writing first.

Can you stop a contract rolling over?

If your business is a microbusiness, your supplier must tell you its renewal prices before your contract ends. If you don't agree a new contract, some contracts roll over. Citizens Advice says a rollover period can't be more than 12 months, and that if you're in one, it's usually worth switching, because rollover rates are often very expensive.

Under the licence rules for microbusinesses, a supplier can only roll you into a further fixed term if you haven't told it in writing, before the end of your contract, that you don't want it to. So if you're planning to leave, write to your supplier before your end date.

Leaving deemed, out-of-contract and rolling contracts

It's much easier to leave if you're not on a fixed contract:

• Deemed contracts, which you're put on if you use energy without agreeing a contract, can't have a fixed term or an exit fee, and can't require you to give notice before you switch.
• Expired fixed contracts: Citizens Advice says that if you're a microbusiness and your fixed term has ended, you won't need to pay a fee or give notice to switch.
• Variable-rate contracts: Ofgem says you can switch to a new supplier at any time.
• Rolling, or evergreen, contracts: you might have to give notice. For microbusinesses, the notice period can't be more than 30 days, and the supplier must acknowledge your request to end the contract within 5 working days.

Your microbusiness status matters here. Ofgem treats a business as a microbusiness if it has fewer than 10 employees and a turnover or balance sheet of no more than £2 million, or if it uses no more than 100,000 kWh of electricity or 293,000 kWh of gas a year.

Moving premises or closing your business

Ofgem says that if you're moving, you should check before you move whether you can switch supplier or agree a contract for the new premises. Both the business moving out and the business moving in should tell the supplier.

What happens to the contract for the premises you're leaving depends on its terms. Some suppliers don't charge for moving out: British Gas, for example, says there's no penalty for moving out of business premises it supplies. Check your contract and ask your supplier before you give notice on your lease.

If your business is closing or entering an insolvency process, ask your accountant or insolvency practitioner how your energy contracts will be handled, and tell your supplier your closing date.

If you can't leave, talk to your supplier

Citizens Advice suggests calling your supplier to ask whether it can offer a better deal, and says suppliers have to tell you if you can move to a cheaper tariff, although you might have to sign a new contract.

Some suppliers have offered what's sometimes called "blend and extend": a longer fixed contract at a lower average unit rate. Ofgem has noted that suppliers may not be able to offer this kind of renegotiation, and that a longer contract can cause its own affordability problems, so look carefully at the total cost before you agree.

What to do if you think your contract was mis-sold

If you think you were given wrong or misleading information when you agreed a contract, follow these steps in order.

1. Complain to the supplier. Since 19 December 2024, Ofgem's complaints handling rules apply to small businesses as well as microbusinesses.
2. If a broker arranged it, complain to the broker too. Ofgem says to contact the broker first and try to resolve it with them.
3. Take it to the Energy Ombudsman if it isn't resolved after 8 weeks, or sooner if you get a deadlock letter. Citizens Advice says you then have a year from the deadlock letter to complain. The Energy Ombudsman covers microbusinesses and, since December 2024, small businesses, and it's free.
4. For a broker, use the broker's dispute resolution scheme. Since 1 December 2022 for microbusiness contracts, and since 19 December 2024 for small business contracts, suppliers may only work with brokers that belong to one. Citizens Advice names three schemes: the Energy Ombudsman, the Utilities Intermediaries Association and the Dispute Resolution Ombudsman.

The government has announced that the waiting period before you can go to the Energy Ombudsman will drop from 8 weeks to 6, for business and household customers, but we haven't seen a start date.

A small business, for the Ombudsman, has fewer than 50 employees and a turnover of up to £6.5 million or a balance sheet of up to £5 million, or uses up to 200,000 kWh of electricity or 500,000 kWh of gas a year.

Broker fees, and a warning about scams

Your contract may show what you're paying a broker. Since 1 October 2022, microbusiness contracts have had to show broker costs in the principal terms, and for contracts signed since 1 October 2024, all business customers get broker fees shown in their principal terms. Fees you pay a broker directly don't have to appear there.

Ofgem has warned about scammers claiming that Ofgem has made energy brokers repay undisclosed commission. Ofgem has no such power. It says claims may be possible through the courts, and that you should get independent legal advice. The Energy Ombudsman is free, and it says you don't need legal help to bring a dispute.

In a 2023 letter about high fixed prices, Ofgem said: "Unless there is evidence of misselling, Ofgem cannot unpick private law contracts between commercial customers." Ofgem doesn't investigate individual disputes, though. Our guide to mis-sold business energy contracts explains where to complain.