Lay My Hat

Does anyone know if a furnished holiday letting should be on a business electricity contract instead of a domestic contract? Or is there no hard and fast rule? I only let the house from March to October and don't live in it the rest of the time. I pay business rates, or at least, I'm registered but don't pay anything as get small business relief. I have no idea how costs compare between business and domestic contracts but I'm assuming business would be more expensive. Am currently on a domestic contract as I just carried it on when we started renting out the house as it was our holiday home before.

Thank you!

Hi Jeebers

This is not something I have seen discussed here. As it is a domestic property I would not expect any benefit from moving to a business contract. These probably make sense for a business that uses a lot more energy like a factory or maybe as small as a chip shop.

I worked on some IT systems in this space a while ago and the technical difference was more frequent billing and smart metering technologies that allowed hourly or daily billing.

We just stay on domestic but check and switch on a regular basis to keep the price down (our heating is electric).

I also use a monitoring system called "the loop" this records all consumption and shows your daily and weekly cost. It also recommends when you should switch based on your consumption and the current available rates. I think it was about £40 or you can pay monthly.

Hi,

I had the same query and the electricity / gas companies also don't have any clear boundaries on the matter - they don't seem to understand the concept of a holiday let! My holiday let used to be a shop before we converted it and was already on a business energy contract. Upon contacting the energy supplier to switch to domestic, they insisted that we stay on a business contract as it is a business (IE we have paying customers and make money from the dwelling). However, most businesses pay 20% VAT on energy bills, but holiday lets are eligible to pay the reduced rate of 5% which is the rate charged on domestic energy. So if you do end up with a business contract, make sure you apply for the reduction in VAT! I negotiated good rates, so I don't appear to pay more than a domestic rate, but I probably would have just stuck with a domestic supply if that was what was already in place!

Kind regards,

Katie

Kgreen wrote:Hi,

I had the same query and the electricity / gas companies also don't have any clear boundaries on the matter - they don't seem to understand the concept of a holiday let! My holiday let used to be a shop before we converted it and was already on a business energy contract. Upon contacting the energy supplier to switch to domestic, they insisted that we stay on a business contract as it is a business (IE we have paying customers and make money from the dwelling). However, most businesses pay 20% VAT on energy bills, but holiday lets are eligible to pay the reduced rate of 5% which is the rate charged on domestic energy. So if you do end up with a business contract, make sure you apply for the reduction in VAT! I negotiated good rates, so I don't appear to pay more than a domestic rate, but I probably would have just stuck with a domestic supply if that was what was already in place!

Kind regards,

Katie

Useful info! Thanks.

Hi, thanks for your replies.

Ianh100 - as you say I don't think there is any benefit. I just wondered if there was any rule as there is with business rates. My heating is electric too so I keep an eye out and switch regularly too. We take weekly readings so I can keep an eye on costs.

Katie - thanks for the useful info. I will stay domestic now but it's good to know that.

Jeebers wrote:Hi, thanks for your replies.

Ianh100 - as you say I don't think there is any benefit. .

You can negotiate your own deal with a business contract. You can't with a domestic contract. So it depends on the market which is going to be better.

You can negotiate your own deal with a business contract. You can't with a domestic contract. So it depends on the market which is going to be better.[/quote]


True - but I did get some quotes for business contracts and they all came out quite a bit higher so it depends how good your negotiating skills are as to whether you just negotiate down to domestic level or further. Also they were minimum 3 years... fine if you feel the prices are only going to rise.

Hi - I was looking into this myself recently & saw something online which said that on a business contract you are locked in for a specific amount of time & have to give notice to leave, whereas on domestic you can chop & change if you wish - so for a small business holiday let it would be better to stay on domestic. (Quote)

Tillee wrote:Hi - I was looking into this myself recently & saw something online which said that on a business contract you are locked in for a specific amount of time & have to give notice to leave, whereas on domestic you can chop & change if you wish - so for a small business holiday let it would be better to stay on domestic. (Quote)

You pay a guaranteed price over the fixed term. If you're happy with the price when your deal started, why would you want to change? Electric prices only seem to be going up nowadays.