Microbusiness energy rules: your protections explained

What counts as a microbusiness for energy?

The definition comes from the law that sets up the energy redress scheme, and Ofgem and the Energy Ombudsman use the same test. You're a microbusiness if any one of these applies:

• you use up to 100,000 kWh of electricity a year;
• you use up to 293,000 kWh of gas a year;
• you have fewer than 10 employees (or their full-time equivalent) and a turnover or balance sheet total of up to £2 million.

Gas and electricity are assessed separately, so a business can be a microbusiness for one fuel and not the other. The money limit was in euros until 19 December 2024, when it changed to £2 million, so older documents may still say €2 million.

A small business, under the same law, is one that isn't a microbusiness but uses up to 200,000 kWh of electricity or 500,000 kWh of gas a year, or has fewer than 50 employees and a turnover of up to £6.5 million or a balance sheet of up to £5 million. Small businesses share some, but not all, of the protections below.

Which protections apply to whom

The renewal, rollover, notice and back-billing rules are written for microbusinesses only, and we haven't found anything extending them to small businesses.

Before you agree a contract

• Clear terms. Before you agree, your supplier must tell you, in plain language, that you're entering a legally binding contract, and give you its principal terms. If you're using a broker, the supplier can do this itself or make sure the broker does.
• In writing. All the contract's express terms must be set out in writing, in plain and intelligible language. Your supplier must take all reasonable steps to send you a copy within 10 days of agreeing, or as soon as reasonably practicable after that.
• Broker costs. Since 1 October 2022, a microbusiness contract's principal terms must show any broker costs included in your supplier's charges, for the whole contract, as an amount of money. A fee you pay a broker directly doesn't have to be shown there, so ask the broker about it before you agree.
• No cooling-off. Ofgem says there's no cooling-off period once you agree a business energy contract. It also says a contract you agree over the phone is binding. It considered a 14-day cooling-off period for microbusinesses in 2021, and decided in 2022 not to bring one in.

When your fixed contract is ending

This is where the microbusiness rules do most of their work.

• Renewal information. Unless you've already agreed a new contract with your supplier, it must send you renewal information about 60 days before your fixed term ends. It includes a statement of renewal terms, the terms that would apply after the fixed term, the prices you pay now and how much energy you've used in a year.
• Your end date on every bill. Every bill for a fixed-term microbusiness contract must show when the contract ends, and say that you can write to your supplier before then to stop it rolling over or to end it.
• No notice needed to switch. Since 1 October 2022, suppliers can't require a microbusiness to give notice that it intends to switch, except on an evergreen contract. Writing to your supplier before the end date still matters, though, because it stops a rollover.
• Ending the contract. You can write to your supplier at any time before your end date to end the contract from the end of the fixed term.

What to do when your renewal letter arrives

The renewal letter is your cue to act, while you still have time before the end date:

1. Note your end date, and put a reminder in your diary a few weeks before it.
2. Check the figures in the pack. Compare the yearly consumption it shows with your own bills, and the renewal prices with what you pay now.
3. Compare business energy prices from other suppliers, or through a broker you've checked. Our business electricity page shows what businesses of each size pay per kWh.
4. Check any broker fee in the principal terms of a new contract before you agree.
5. Write to your current supplier before the end date if you don't want to be rolled over. You don't have to give notice to switch, but a written notification stops a rollover.

If you do nothing, your supplier may roll you over for up to 12 months or move you onto out-of-contract rates, which Ofgem says are usually more expensive than a fixed contract.

Rollovers, evergreen and out-of-contract rates

If your fixed term ends without a new contract, what happens next depends on your contract. The rules for microbusinesses are:

What happens when a microbusiness contract ends

There's no general right to leave a fixed-term contract early, and Ofgem says most suppliers won't let you switch before your contract ends.

Back-billing: the 12-month limit

Since 1 November 2018, suppliers can't bill a microbusiness for energy used more than 12 months ago if it wasn't billed correctly at the time. The limit covers standing charges and other supply charges as well as the energy itself.

It doesn't apply if the customer behaved in an obstructive or manifestly unreasonable way, for example by blocking access to the meter. Not sending meter readings doesn't count. It also doesn't stop a supplier chasing an earlier bill that already followed the rule.

Brokers: the rules that protect you

Many businesses agree contracts through a broker. The rules are:

• Fees in the contract. Microbusiness contracts have had to show broker costs in the principal terms since 1 October 2022. Since then, the rule has been extended to every business contract signed on or after 1 October 2024. Suppliers must also give you details of broker fees if you ask.
• Redress schemes. Suppliers may only work with brokers that belong to a qualifying dispute scheme: for microbusiness contracts since 1 December 2022, and for small business contracts since 19 December 2024. The schemes are the Energy Ombudsman, the Utilities Intermediaries Association and the Dispute Resolution Ombudsman. If your broker isn't in one, you can't take a complaint to a scheme.
• Mis-selling. If you think a broker misled you about a contract, complain to the broker in writing first. If that doesn't sort it out, you can take it to the dispute scheme your broker belongs to, and the Citizens Advice consumer service can advise you. Our guide to mis-sold business energy contracts explains the steps.

Brokers themselves aren't regulated by Ofgem yet. In October 2025, the government said it would make Ofgem their regulator, which needs a new law, and Ofgem began a review of the broker market in June 2026, with a final report expected in winter 2026/27.

Complaints and the Energy Ombudsman

1. Complain to your supplier or broker first, ideally in writing so you have a record.
2. Give it 8 weeks. If it hasn't resolved your complaint by then, or sends you a deadlock letter saying it can't do more, you can go to the Energy Ombudsman. For a broker, go to the dispute scheme it belongs to.
3. Go within 12 months of the deadlock letter.

The Ombudsman is free for microbusinesses and small businesses. It can require an apology or explanation, practical action such as correcting an account, or a payment: up to £20,000 for a microbusiness or small business complaint against a supplier, and up to £10,000 for a complaint about a broker. If you accept its final decision, it binds you and the company; if you don't, you can still go to court.

Your supplier must tell you at least once a year that Citizens Advice can help. In England and Wales, its consumer service is on 0808 223 1133, and it can refer urgent cases, including where you're at risk of disconnection, to the Extra Help Unit.