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Business Electric Standing Charge

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brainiac | 13:21 Tue 20th Feb 2024 | Business & Finance
5 Answers

Does anyone know if there is a difference between domestic electric standing charge and a business one?

I've just found out that our residents' association is paying £1 a day, which is almost double the domestic rate.



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Is the £1 a day shared between several residents?

Are they charged a higher rate of VAT?

Question Author

It's for the electricity meter that is to do with communal lighting in the courtyard

Domestic customers are covered by Ofgem's price cap, which means that suppliers can't charge more than 53.35p per day on the default 'standard variable' tariff:

Business customers aren't covered by the price cap, meaning that (say) your local pub could be paying several times the prices that you do in your own home.

Business tariffs are complicated and based upon 'profile classes'.  Your residents' association will almost certainly be categorised as 'Profile Class 03' though.  Unless you've negotiated an individual contract price with your supplier, you'll be charged the 'deemed contract' rate for Profile Class 03. 

With British Gas, for example, the deemed contract rate for a Profile Class 03 business is 40.40p per kWh (which is 41% higher than the price cap for domestic customers), with a daily standing charge of 198.59p (which is 272% higher than the price cap for domestic customers).

So, if your residents' association is paying around £1 per day, you're only paying around a half of what British Gas charges customers who're in a similar situation to yours.

Question Author

Thanks for that, Chris.  I'm not involved in the running of the residents' association any more (thank heavens) but we seem to be paying a large amount for what amounts to four lights in the courtyard and two in the bin stores.

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