What Happens If You Don’t Renew Your Business Energy Contract? UK Guide

Running a business in the UK comes with many responsibilities, and managing your energy contract is one of the easiest things to forget. Most business owners are busy focusing on customers, staff, stock, and day-to-day operations. So when the end date of a business energy contract approaches, it often slips under the radar.

But here’s the truth: if you don’t renew your business energy contract, you could end up paying much higher rates without realising. Many businesses in the UK move onto something called deemed rates or a rollover contract, which can increase costs significantly.

In this guide, we will explain what happens when a business energy contract ends, what a deemed contract is, how rollover rates work, and what steps you should take to protect your business from unnecessary charges. We’ll also share simple tips to help you renew at the right time and avoid paying out-of-contract business energy rates.

If you are a small business, an office, a warehouse, a retail unit, a restaurant, or a multi-site company, this blog will help you understand your options clearly.

1) Why Business Energy Contracts Need Renewing

Most UK businesses sign a contract for their gas and electricity supply for a fixed period, such as:

1 year
2 years
3 years
5 years

This is usually done to secure a competitive unit rate, protect against market changes, and keep costs predictable.

When your contract is active, you typically benefit from:

Agreed rates per kWh
Agreed standing charges
Fixed terms for the contract length
More stable monthly costs
Less risk of surprise price increases

But when your contract reaches its end date, the supplier still needs to provide energy to your premises. Your lights must stay on, your equipment must run, and your operations can’t stop.

So if you don’t renew, your supplier will normally move you onto an alternative arrangement automatically.

This is where problems often begin.

2) What Happens When a Business Energy Contract Ends?

If your business energy contract expires and you haven’t arranged a renewal, one of these usually happens:

Option A: You Move onto a Deemed Contract

This is the most common situation. A deemed contract happens when you continue using gas or electricity at a business premises without agreeing a new fixed contract.

This can occur when:

Your contract ends and you keep using energy
You move into a new premises and haven’t signed a contract yet
You take over a unit where energy is already supplied
The previous tenant left without closing the account

A deemed contract is not something most business owners choose. It happens automatically, and it can be expensive.

Option B: You Go onto Out-of-Contract Rates

Sometimes suppliers describe it as:

Out-of-contract rates
Standard variable rates
Default tariff for businesses

These are usually higher than negotiated fixed rates.

Option C: You Are Placed on a Rollover Contract

Some business energy suppliers use rollover contracts (also called auto-renewal contracts). This means your contract renews automatically, sometimes for another 12 months or longer, unless you stop it within a certain time window.

This is a big reason why businesses overpay for energy.

3) What Is a Deemed Contract in Business Energy?

A deemed contract is a legal agreement that applies when a business uses energy without signing a formal contract with the supplier.

In simple terms:
If you use energy, you are agreeing to pay for it.

The supplier is still responsible for supplying your gas or electricity, and you are responsible for paying the bills.

Common Reasons Businesses End Up on Deemed Rates

Many UK businesses end up on deemed rates because they:

Forgot their contract end date
Missed the renewal window
Didn’t respond to supplier letters or emails
Assumed the supplier would contact them again
Moved premises and didn’t set up a contract
Didn’t know they were responsible for the meter
Didn’t have time to compare business energy quotes

4) Are Deemed Rates More Expensive for UK Businesses?

Yes, in most cases, deemed rates are more expensive than fixed business energy contracts.

Deemed rates can be higher because:

They are not negotiated
They include more risk for the supplier
They are designed as a default option
They can change more frequently
They may include higher standing charges

This is why “doing nothing” can cost your business more money than you expect.

Many business owners only notice the problem when:

Monthly direct debit jumps
Invoices increase suddenly
Cash flow becomes tighter
Bills become harder to predict

5) What Is a Rollover Business Energy Contract?

A rollover business energy contract is when your supplier automatically renews your contract for a new term once the current one ends.

It might renew for:

12 months
24 months
Another fixed term

This can happen if you do not cancel in time.

Why Rollover Contracts Can Be a Problem

Rollover contracts can cause issues because:

You may not get the best rates
You may be locked in again
You might face termination fees if you try to leave
You lose the chance to compare business energy suppliers

Many businesses only realise they have rolled over when:

They request a new quote
They try to switch supplier
They receive a contract confirmation
They get charged an exit fee

6) How to Know If Your Business Energy Contract Is Ending Soon

If you’re not sure how to check your business energy contract end date, here are the easiest ways:

Check Your Latest Bill

Most business energy bills show:

Contract end date
Tariff name
Account number
Meter point reference number (MPRN for gas / MPAN for electricity)

Check Your Contract Email or Welcome Pack

When you signed your contract, you should have received:

Contract confirmation
Pricing schedule
Terms and conditions
Start date and end date

Ask Your Supplier

You can contact your supplier and ask:

When your contract ends
What notice period applies
Whether your contract has auto-renewal
What rates apply if you do nothing

Use a Business Energy Broker

A broker can often check:

Your contract end date
Your renewal window
Available market options
Supplier comparisons

7) What Is the Business Energy Renewal Window in the UK?

Most suppliers allow you to renew or switch within a set time period before your contract ends.

This is often called the:

Renewal window
Switching window
Contract review period

For many businesses, it can be between:

30 days before end date
60 days before end date
90 days before end date

This depends on your supplier and contract terms.

Why Renewing Early Matters

Renewing early helps because:

You avoid deemed rates
You avoid rushed decisions
You have time to compare offers
You can lock in better rates
You protect your cash flow

8) What Happens If You Ignore Your Business Energy Renewal Letter?

Many suppliers send renewal letters, emails, or calls before the contract ends. If you ignore them, you may be moved onto:

Deemed rates
Out-of-contract rates
Rollover contract rates

Some businesses ignore renewal notices because they think:

It’s just marketing
It’s not urgent
They will deal with it later
The rates won’t change much

But in business energy, small rate changes can have a big impact.

Even a difference of 2p-5p per kWh can mean hundreds or thousands of pounds per year, depending on usage.

9) Can You Switch Business Energy Supplier After Contract Ends?

Yes, in many cases, you can still switch after your contract ends.

If you are on a deemed contract, switching may be possible without long-term penalties, but the process depends on:

Supplier rules
Your meter type
Whether there are outstanding debts
Whether your business is a microbusiness
Whether you have agreed to any new terms

Switching While on Deemed Rates

If you are paying out-of-contract business energy rates, switching can often be a smart move because:

You may access lower unit rates
You can secure a fixed contract again
You can stabilise your monthly costs

However, the longer you stay on deemed rates, the more money you may lose.

10) Will Your Business Energy Supply Be Cut Off If You Don’t Renew?

In most cases, your energy supply will not be cut off simply because you didn’t renew.

Suppliers will continue providing energy because:

Businesses must still operate
Energy supply is continuous
The deemed contract covers ongoing usage

However, there is one important exception:

If Bills Are Not Paid

If your business stops paying energy bills, suppliers can take action such as:

Debt collection
Late payment fees
Installing a prepayment meter (in some cases)
Contract enforcement
Disconnection as a last resort

So the risk is not “no renewal”, but no payment.

11) Hidden Costs of Staying Out of Contract

Many business owners think the only cost is a higher unit rate, but there can be other issues too.

1. Higher Standing Charges

Standing charges can rise on deemed or default tariffs.

2. Unpredictable Bills

If rates change regularly, budgeting becomes harder.

3. Reduced Negotiation Power

Once you are on deemed rates, you are reacting instead of planning.

4. Cash Flow Pressure

Higher bills mean less money for:

Wages
Stock
Marketing
Equipment
Growth

5. Admin Stress

Sorting out energy contracts late can be stressful and time-consuming.

12) Fixed vs Variable Business Energy Contracts (Simple Explanation)

When renewing, businesses often choose between fixed or variable pricing.

Fixed Business Energy Contract

With fixed contracts, you get:

Stable unit rates
Predictable bills
Protection against market increases
Clear contract terms

This is popular for businesses that want stability.

Variable Business Energy Contract

With variable contracts, rates can change based on the market.

This may work if:

You can handle price changes
You want flexibility
You believe prices may fall

But it also carries risk, especially during volatile periods.

13) How to Avoid Paying Out-of-Contract Business Energy Rates

Here are practical steps to protect your business.

Step 1: Know Your Contract End Date

Put it in your calendar and set reminders 90, 60, and 30 days before.

Step 2: Start Comparing Early

The best time to review business energy quotes is before your contract ends.

Step 3: Check for Auto-Renewal Clauses

Some contracts renew automatically unless you stop them in time.

Step 4: Speak to an Expert

A broker or energy consultant can guide you through:

Pricing comparisons
Supplier options
Contract terms
Renewal timing

Step 5: Don’t Leave It to the Last Week

Last-minute renewals limit your options and may lead to higher rates.

14) What to Do If Your Contract Has Already Expired

If your business energy contract has already ended, don’t panic. You still have options.

1. Confirm What Rates You Are On

Ask your supplier:

Are you on deemed rates?
Are you on a rollover contract?
What are your current unit rates and standing charges?

2. Get a New Quote Immediately

Even if you’ve been out of contract for a few days or weeks, switching to a fixed deal may reduce costs.

3. Review Your Latest Bills

Look for:

Sudden increases
Estimated readings
Billing errors
Incorrect VAT or CCL charges

4. Improve Your Usage

While renewing is the main fix, you can also reduce costs by:

Switching off unused equipment
Checking heating timers
Upgrading to LED lighting
Monitoring peak usage

15) FAQs: Business Energy Contract Renewal in the UK

Here are answers to common questions UK businesses ask.

What happens if I don’t sign a new business energy contract?

Your supplier will normally keep supplying energy, but you will likely move onto deemed or out-of-contract rates, which can be more expensive.

Can my business energy contract automatically renew?

Yes. Some suppliers have rollover clauses. This is why it’s important to check your renewal notice period and contract terms.

How long do deemed contracts last?

A deemed contract usually lasts until you agree a new contract or switch supplier.

Are deemed rates the same for gas and electricity?

No. Deemed rates vary depending on your supplier, meter type, and usage.

Can I negotiate my business energy renewal rate?

Sometimes, yes. But the best way to get competitive pricing is to compare multiple suppliers and choose the most suitable option.

16) Final Thoughts: Don’t Let Your Business Drift onto Expensive Rates

So, what happens if you don’t renew your business energy contract?

In most cases, your supplier will still provide energy, but you may end up paying:

Deemed rates
Rollover contract rates
Out-of-contract business energy prices

This can increase your bills without warning and create unnecessary stress for your business.

The good news is that avoiding this is simple. The best approach is to:

Track your contract end date
Compare quotes early
Renew within the right window
Avoid deemed and rollover rates
Get expert support if needed

Need help renewing your business energy contract?

At Galaxy Region Utilities, we help UK businesses secure competitive gas and electricity rates through expert procurement, bill validation, and ongoing support.

Speak to our team today and get a tailored quote for your business energy renewal.