Business energy debt and arrears

Falling behind on a business energy bill is stressful, but it does not mean your supply is about to be cut off. Suppliers have to follow a set process before they can disconnect a business for debt, and there is real help available if you engage with the problem early rather than letting it sit.

What should you do first if you cannot pay?

Contact your supplier before it contacts you. Citizens Advice is direct about this: if you are in debt to your supplier, you should get in touch to discuss ways to pay what you owe, and your supplier should help you reach a solution both sides can live with. Waiting for a letter or a call rarely helps, because it uses up time you could spend agreeing a plan.

Useful steps at this stage:

1. Work out exactly what you owe and check the bill is accurate, since disputing a genuinely wrong bill is different from being unable to pay a correct one.
2. Call your supplier and ask for its debt or payment support team, not the general sales line.
3. Propose a repayment plan based on what you can actually afford, rather than accepting the first figure offered if it is not realistic.
4. Get everything in writing, including the amount agreed, the payment schedule, and confirmation that your supply will not be at risk while you stick to it.
5. Get independent advice early from Business Debtline or Citizens Advice if you are not getting anywhere with your supplier directly.

Can your supplier disconnect your business for unpaid bills?

Only as a last resort, and only through a formal legal process. Ofgem’s own guidance on non-domestic debt management is explicit that disconnection should be a last resort, not a default response to a missed payment. Before it gets anywhere close to that point, Ofgem expects suppliers to give business customers a fair opportunity to engage and discuss options, including reasonable repayment arrangements, and to consider site visits where appropriate rather than moving straight to enforcement.

If agreement cannot be reached, Citizens Advice sets out the legal route a supplier must follow to actually disconnect a business:

Stage	What happens	Minimum notice
Bill sent	Your supplier issues the bill you have not paid	n/a
Warrant application	Supplier can apply to court for a warrant to enter and disconnect, but not until at least 28 days after the bill was sent	At least 21 days’ notice that it intends to apply
Court hearing	You can join the hearing (often by video call) and explain to the judge why disconnection should not go ahead	n/a
Warrant granted	Supplier has legal permission to enter premises	n/a
Disconnection carried out	Supplier uses the warrant to disconnect	At least 7 days for gas, at least 7 working days for electricity

A supplier cannot skip straight from an unpaid bill to switching off your supply. Every stage above requires notice, and you have the right to appear at the court hearing and put your case.

What does disconnection actually cost?

Disconnecting and later reconnecting a supply is not free. Citizens Advice notes that suppliers can charge additional fees for both disconnecting a premises and reconnecting it afterwards, on top of whatever debt triggered the process in the first place. Ofgem’s good practice guidance for non-domestic suppliers specifically expects “reasonable charges through the disconnection process”, which is a deliberately loose standard rather than a fixed cap, so it is worth asking your supplier upfront exactly what it would charge at each stage if you are worried the process might reach that point. Getting a repayment plan agreed before a warrant application is made avoids these costs altogether.

What if a debt agent visits your premises?

Ofgem’s guidance expects suppliers to consider site visits as part of engaging with a business in payment difficulty, and this can happen before any court process starts, as a more direct way of discussing your situation than letters or calls. If someone attends claiming to represent your supplier or its agents:

• Ask for identification before letting them in or discussing your account, and check it against your supplier’s known contact details if you are unsure.
• Remember a visit alone gives no legal right of entry or disconnection. Only a court-issued warrant allows a supplier to disconnect a business against its wishes, as set out above.
• Use the visit as an opportunity, not a threat. Ofgem’s stated intent is for site visits to help agree a workable way forward, so treat it as a chance to explain your circumstances and propose a plan.

Ofgem has previously written directly to supplier CEOs to remind them that its expectations of fair treatment extend to agents acting on their behalf, following serious concerns raised in 2023 about how debt agents were treating vulnerable customers. That scrutiny applies across the market, not just to the case that prompted it.

What if your premises share a building with domestic residents?

Some non-domestic supplies, for example the communal areas of a block of flats, sit alongside domestic customers who are not party to the business contract themselves. Ofgem’s non-domestic debt and disconnection guidance specifically addresses this kind of shared occupancy, and its scope was extended in 2026 to cover non-domestic supplies serving communal areas of buildings with domestic residents. The underlying concern is straightforward: disconnecting a non-domestic account should not inadvertently cut off essential services, such as lighting or heating in shared areas, that affect people who had no part in the debt. If this applies to your premises, make sure your supplier is aware of the domestic end users involved when you discuss your account.

What if you think disconnection would be wrong or disproportionate?

Attend the court hearing if a warrant application is made. Citizens Advice notes you can usually join by video link and tell the judge why your supply should not be disconnected, for example if you have a repayment plan in place, if the debt is disputed, or if disconnection would cause disproportionate harm (a working commercial kitchen or a business with vulnerable occupants on site, for instance). If you believe you were disconnected in error, Ofgem’s guidance sets an expectation that suppliers provide compensation in those circumstances.

Are business customers protected the same way as households?

Not to the same degree, and it is worth knowing this honestly rather than assuming the domestic rulebook applies. Ofgem’s own guidance acknowledges that non-domestic customers do not have the same detailed protections as domestic consumers, partly because there is no price cap for business energy and partly because the non-domestic market covers everything from a single shop to a large industrial site with very different risk profiles. Much of what applies to business debt and disconnection is set out as good practice guidance for suppliers to follow, rather than binding licence conditions covering every scenario.

That gap has been narrowing. Since 1 July 2024, Ofgem’s Standards of Conduct, requiring suppliers to give information that is complete, accurate and not misleading and to treat customers fairly, apply to all non-domestic customers regardless of size, not just microbusinesses. From December 2024, small businesses (not just micro) gained access to the Energy Ombudsman for unresolved complaints. Where you sit on that timeline affects which formal protections you can point to, but Ofgem’s general expectation of fair treatment during debt and disconnection is meant to apply broadly.

Can you be moved onto a prepayment meter because of debt?

Business premises do not have the same tightly restricted rules around forced prepayment meter installation that apply to vulnerable domestic customers. Ofgem’s February 2023 letter to suppliers followed serious concerns reported about how one domestic supplier and its debt agents had been treating vulnerable customers, including forcing them onto prepayment meters, and Ofgem used the letter to remind all suppliers, including in the non-domestic market, that it expects fair treatment of customers, particularly where a non-domestic contract has domestic end users sharing the premises, or where a customer is a microbusiness protected under specific licence conditions. Ofgem said it would take swift enforcement action where suppliers fall short. If you believe a prepayment meter is being proposed unfairly or without proper engagement, raise it directly with your supplier and, if unresolved, escalate it as a complaint.

Does debt stop you switching supplier?

It can, but not automatically. As explained in our guide on business energy credit checks and switching, a current supplier can only object to a switch where your contract allows it, most commonly where you have overdue, undisputed bills. Two practical routes forward:

• Pay off or agree a plan for any undisputed balance, which removes the usual ground for an objection.
• Formally dispute any bill you genuinely disagree with, since a supplier’s objection right generally covers undisputed debt, not amounts you are actively contesting.

Being in debt with your current supplier is also a factor a new supplier will weigh during its own credit assessment. Our guide to business energy credit checks and deposits explains what a poor credit position can mean for a new contract.

What if your business is closing or being sold while it owes money?

Debt does not disappear because a business changes hands or stops trading. If you are closing down, see our guide on energy bills when a business closes for how to settle a final account properly. If you are selling or buying a business with an existing energy contract and outstanding balance, our guide to energy contracts when buying or selling a business covers how that debt and the contract itself are typically handled.

Where can you get help?

• Business Debtline offers free, independent debt advice specifically for small businesses and self-employed people, including on energy arrears.
• Citizens Advice provides general guidance on business energy problems and can point you toward further support, including mental health resources if the situation is affecting you personally.
• The Energy Ombudsman can look at an unresolved complaint about how your supplier has handled your debt or disconnection process, once your business is eligible (microbusinesses, and small businesses from December 2024) and your complaint has been open for eight weeks without resolution, or you have received a deadlock letter. Our guide to business energy complaints explains this process in full.

Getting ahead of the problem, by contacting your supplier the moment you know you cannot pay on time, remains the single most effective thing you can do. Once you are back on stable footing, you can compare business energy quotes with us to make sure you are not paying more than you need to.

Frequently asked questions