The majority of businesses will have breathed a sigh of relief when the Government announced it would be introducing an Energy Bill Relief Scheme over the winter period, providing a similar level of support as domestic customers in regards to rising energy bills.
It began at the beginning of this month and is currently in place until the end of March next year, with the Government set to review this decision in around 3 months time. But what does the scheme entail, which businesses are eligible and how do you receive the discount? We’ve answered all of these questions below.
What is the Energy Bill Relief Scheme?
The scheme provides eligible businesses with a discount on their gas and electricity unit prices. The discount is worked out by comparing the wholesale portion of the unit price you’re expected to pay (predicted to be roughly £600 per MWh for electricity and £180 per MWh for gas) with the Government’s supported price which is set at £211 per MWh for electricity and £75 per MWh for gas.
Who is eligible?
The majority of those on a non-domestic contract will be eligible for the scheme. According to the Government website, this includes businesses and both voluntary and public sector organisations that are:
- on an existing fixed price contract, agreed on or after 1 December 2021
- signing a new fixed price contract
- on a deemed/out of contract or variable tariff
- on a flexible purchase or similar contract
There are, however, a few limited exclusions. Please visit the Government website to find out more.
How much discount will I receive?
The discount will be in pence per kilowatt hour, but how much discount you receive will depend on the type of contract or tariff you’re on:
Fixed contracts
If you’re on a fixed contract, your discount will depend on the wholesale price for the day that your contract was agreed. You’ll be discounted the difference between this price and the Government’s supported price. If your wholesale price is less than the supported price, you won’t be eligible for the scheme.
Variable, deemed and all other contracts
For the majority of other contracts, you’ll still receive a discount based on the difference between wholesale prices and the supported price, but it will be capped at £345 MWh for electricity and £91 MWh for gas.
Do I need to apply for the discount?
No, the discount will be automatically deducted from your energy bills by your supplier. Phew – that’s one less thing to worry about! You should notice this discount when you receive your October bill next month.
Further support
If you’d like further information, please visit the Energy Bill Relief Scheme guidance page where you’ll find the full details of the scheme. Be sure to check out our top tips for reducing your energy usage both at home and at the office too! Here you’ll find lots of energy-saving suggestions to help you further reduce your gas and electricity expenditure.
© 2019 Warr & Co Chartered Accountants. Warr & Co Chartered Accountants is a member of The Institute of Chartered Accountants in England & Wales (ICAEW). Whilst the information detailed here is updated regularly to ensure it remains factually correct, it does not in any way constitute specific advice and no responsibility shall be accepted for any actions taken directly as a consequence of reading it. If you would like to discuss any of the points raised and / or engage our services in providing advice specific to your personal circumstances, please feel free to contact any one of the partners on 0161 477 6789 or contact us via our website forms. Warr & Co Chartered Accountants are registered to carry our audit work in the UK, our audit registration number is C002961684, for more information please visit www.auditregister.org.uk.