If you’ve ever received a bill from your energy company that is higher than expected, it could be a back bill. Back bills are charges for energy use that happened more than 12 months ago, but that you haven’t been billed for yet. These bills can come as a shock, but there are rules in place to protect you.

According to a survey by the UK’s Energy Ombudsman, nearly 30% of small businesses have experienced being back-billed from their energy firm. To help UK businesses understand the concept of energy back-billing and how to mitigate its impact, we have put together this comprehensive guide.

What is Energy Back Billing?

Energy back-billing occurs when a business is billed for energy usage that has not been recorded or captured by their energy supplier. This can happen when a business changes energy supplier, moves to a new premises, or when there is a technical issue with their energy meter. The business is then charged for the energy usage that was missed, which can result in a large bill.

Why Does Energy Back-billing Happen?

There are several reasons why companies may be back-billed. Some of the most common reasons include:

• Energy meter errors: Energy meters can malfunction or become faulty, leading to inaccurate readings and undercharging.
• Late meter readings: If a business does not provide regular meter readings to their energy company, the supplier may estimate usage based on past usage patterns. This can result in a difference between the estimated and actual usage, leading to back-billing.
• Moving to a new premises: When a business moves to a new premises, their energy firm may not be able to accurately bill for the energy usage. This can result in being back-billed for the previous premises and the new one.
• Changing energy suppliers: When a business switches energy firms, there may be a delay in the transfer of information between the old and new supplier. This can result in a gap in billing.

How Can UK Businesses Mitigate the Impact of Energy Back-billing?

To avoid or minimise the impact of energy being back-billed, UK businesses can follow these tips:

• Regularly provide meter readings: By providing regular meter readings, businesses can ensure that their energy provider is billing them accurately for their usage.
• Check meter readings: Businesses should regularly check their meter readings to ensure that they are correct. If there are any discrepancies, they should be reported to the supplier immediately.
• Keep accurate records: Businesses should keep accurate records of their energy usage and meter readings to ensure that they can identify any discrepancies.
• Consider a smart meter: A smart meter can provide real-time energy usage data, which can help businesses avoid energy back-billing.
• Switching  suppliers regularly: By switching energy suppliers regularly, businesses can ensure that they are getting the best deal and avoid being stuck with a billing issue.

What steps should you take if you receive a back-bill?

Receiving a back-bill can be a stressful experience for any business, but it is important to address the situation promptly and effectively. Firstly, you should carefully review the back-bill to ensure that the charges are accurate and understand why it was issued. If you have any questions or concerns, your first point of contact should be your energy provider. They should be able to provide more information about the charges and explain why the back-bill was issued. You should also look for any errors or inaccuracies in the bill and notify your supplier if you find any.

If the back-bill is substantial, you may be able to negotiate a payment plan with your supplier to spread the payments out over a longer period of time. However, if the back-bill is complex or you are unable to resolve the issue with your supplier, you may need to seek professional advice from a solicitor or energy specialist. If you dispute the back-bill and are unable to resolve the matter with your supplier, you have the right to take your complaint to the Energy Ombudsman for an independent resolution. Throughout this process, it is important to keep accurate records of your correspondence with your supplier and any steps you take to resolve the back-bill, as this will be useful if you need to escalate the matter further.

How can your business avoid being back billed?

To avoid energy being back billed and keep track of your energy consumption, it is important to take monthly meter readings. By doing so, you can verify that your energy bills are accurate and based on actual consumption rather than estimated usage. If you ever suspect that you have been charged too much or too little, you can check your record of meter readings to confirm.

Additionally, if you notice an unusual increase or decrease in your energy bill, or if you do not receive a bill for a particular month, it is important to contact your energy firm as soon as possible. This will help to prevent any potential back-billing and ensure that your bills are based on accurate meter readings.

Make sure you should always check that your bills include the correct unit rate and standing charge and be on the lookout for any bills that are higher or lower than normal. If you encounter any unusual or unexpected circumstances, it is best to reach out to your energy company immediately. The longer you wait, the more difficult it may be to rectify the situation and the bigger the potential back-bill could be.

Is your energy supplier is breaking the back billing rules?

Energy regulations established by Ofgem play a crucial role in safeguarding both household and small business customers from unexpected and excessive energy bills. As long as you have received an accurate bill, your energy supplier is prohibited from billing you for energy consumption beyond a 12-month period.

However, it is important to note that there are exceptions to this rule. For example, if you have obstructed meter readings or stolen gas or electricity, the supplier may be able to back-bill you beyond the 12-month limit.

It is always a good idea to keep your energy company informed of any changes in your energy consumption or billing patterns and to review your bills regularly to ensure accuracy. You should also inform your supplier that you understand the regulations and your rights as a consumer.

Back-billing can cause a significant financial strain on businesses, leading to thousands of pounds in debt and severe cash flow problems. The Limitations Act of 1980 limits the extent to which UK energy suppliers can claim back arrears for billing errors. Any errors older than six years cannot be claimed back by the supplier, regardless of whether the business was overcharged or undercharged.

Other than through your supplier, what financial and customer support is there for Back billing?

In addition to your energy supplier, there are other sources of support available for those facing back-billing issues. One option is to seek assistance from a Consumer Advice Centre, such as Citizens advice, which provides free and impartial advice on a range of consumer issues, including energy billing and disputes.

Another option is to contact the Energy Ombudsman, which is an independent and impartial service that resolves disputes between consumers and energy companies. If you have a complaint about a back-bill, you can escalate it to the Energy Ombudsman who will investigate the matter and make a final decision. The Energy Ombudsman’s service is free and available to all energy customers, including business customers. If you have an issue about being back billed, it is important to remember that you have rights and options for resolving the matter and seeking support.

What if I can’t afford to pay my business energy back bill?

If you are unable to afford to pay your business energy back bill, it is important to take immediate action. Here are some steps you can take:

1. Contact your energy supplier: Explain your situation and let them know that you are unable to pay the full amount of the back bill in one lump sum. Your supplier may be able to arrange a payment plan that spreads the cost of the bill over a longer period of time.
2. Get advice: Seek advice from a trusted source, such as Citizens advice or a financial advisor, to understand your options. They can help you to negotiate a payment plan with your energy supplier and also advise you on any financial support you may be eligible for.
3. Apply for financial support: If you are on a low income or struggling to pay your bills, you may be eligible for financial support. This could include benefits such as Winter Fuel Payments, Cold Weather Payments, or the Warm Home Discount.
4. Consider switching energy suppliers: If you are paying high energy prices, you may be able to reduce your energy costs by switching to a cheaper supplier. Price comparison websites can help you find the best deal for your business.
5. Challenge the back bill: If you believe that the back bill is incorrect or that your supplier has not followed the correct procedures, you can dispute it. You can use the services of an independent dispute resolution service, such as the Energy Ombudsman, to resolve the issue.