Can you get out of a business energy contract?

Usually you cannot cancel a fixed-term business energy contract early without paying an exit fee, and business contracts have no cooling-off period. You can leave without a penalty at the end of your fixed term, when you are on deemed or out-of-contract rates, and, for microbusinesses, during a rollover period.

Signed a business energy deal and regretting it? Or has something changed, like closing, moving or finding a better price? Whether you can walk away depends on your contract, your business size and why you want to leave.

Can you get out of a business energy contract?

Yes, but it often costs money. A fixed-term contract is a commitment to buy energy at agreed prices until the end date. Your supplier has usually bought that energy in advance, so leaving early leaves it with a cost.

What you can do depends on where you are in the contract:

Your situation	Can you leave?	Exit fee?
Within the fixed term	Only if your contract allows	Usually, check your terms
At the end of the fixed term	Yes, after any notice your contract requires	No
Microbusiness in a rollover period	Yes, at any time	No
Microbusiness on out-of-contract rates	Yes, at any time	No
On a deemed contract	Yes, at any time	No
Supplier has failed	Yes, once the new supplier is appointed	No

Is there a cooling-off period for business energy?

No. Ofgem’s advice for businesses says there is no cooling-off period after you agree a contract, “even when this agreement is made over the phone”. The 14-day cooling-off right applies to household energy contracts, not business ones.

Ofgem consulted on a cooling-off period for microbusinesses but decided not to go ahead with it in March 2022. It said then that it would look at the options again once the new switching system was live. Its current advice still says there is no cooling-off period.

What protection do you have if you were rushed?

• Principal terms first. Before a microbusiness contract is agreed, the supplier or broker must bring its principal terms to your attention. Ofgem has said that just sending an email or text during a sales call is not enough. On a verbal contract, the terms must be clearly explained before you agree.
• Broker costs. For contracts signed from 1 October 2024, suppliers must show broker fees clearly in the principal terms, whatever the size of your business.
• Complaints. If you think you were mis-sold, complain to the supplier or broker. Micro and small businesses can then go to the Energy Ombudsman. See our complaints guide.

How much does it cost to leave early?

Exit fees depend entirely on your contract. There is no standard fee. Two examples from suppliers’ published terms:

• TruEnergy (terms version 2.7, June 2026): if you end the contract early, you pay the greatest of the estimated value of the rest of the contract, the losses from selling energy it bought for you, or any exit fee in the contract. It also charges an administrative termination charge of £100 per supply point.
• Octopus Energy for Business (terms version 2.0): you pay reasonable costs caused by ending the contract, including costs of selling forward energy contracts bought for your supply.

Before you leave early:

1. Ask your supplier for the exit fee in writing.
2. Work out what you would save on a new contract over the same period.
3. Only switch if the saving is bigger than the fee. Citizens Advice gives the same advice.

Your supplier may also be able to block the switch if your contract allows it. The supply licence lets a supplier object to a business customer’s switch where the contract has a term allowing it. TruEnergy’s terms, for example, allow an objection if you try to switch before the end date or have overdue, undisputed bills.

When can you leave without paying an exit fee?

You can leave without a penalty:

• At the end of your fixed term. Plan ahead with our contract renewal guide.
• On a deemed contract. The licence bans termination fees and notice requirements. See our deemed contracts guide.
• During a microbusiness rollover period. The licence says you can switch at any time without a termination fee or higher charges.
• On out-of-contract rates as a microbusiness. No fee and no notice. More in our out-of-contract rates guide.
• When your supplier fails. You will not be charged exit fees for leaving the replacement supplier.
• Where your contract gives you the right. Some contracts let you end the agreement if the supplier changes your prices. TruEnergy’s terms, for example, let you give 30 days’ notice if it varies your charges under a general price-change clause.

Do you need to give notice to end your contract?

Microbusinesses do not have to give notice to leave at the end of a fixed term. Ofgem banned termination notices on microbusiness contracts from 1 October 2022. The exception is an open-ended evergreen contract, where notice cannot be longer than 30 days.

Other businesses should check their contract. Some contracts require written notice before the end date. TruEnergy’s terms ask for at least 30 days’ notice, and without it you may be charged its deemed tariff or rolled onto a 12-month contract. EDF says small businesses on fixed contracts may face exit fees and should check their terms.

What happens if your business closes?

Closing your business does not automatically end your energy contract. You signed a contract for supply at the premises for a set period, and that usually continues until it ends or someone else takes over the supply.

• Tell your supplier as soon as you know, with the date you will stop trading or leave the premises.
• Take final meter readings, ideally dated photos. Citizens Advice also recommends switching everything off, as you may still be charged.
• Ask what you owe. Check whether an exit fee applies if you want to end supply before the end date.
• If you are leaving the premises, give the supplier your forwarding address and the details of whoever is now responsible, such as the landlord. For electricity, the law makes the owner responsible under a deemed contract where premises are unoccupied.

If your company enters insolvency

In formal insolvency procedures such as administration and liquidation, section 233B of the Insolvency Act 1986 generally stops a supplier ending a supply contract just because the company has entered the procedure. The supplier can end it with the office-holder’s consent, or with the court’s permission if continuing would cause it hardship. Get advice from the insolvency practitioner handling the case.

What happens if you move premises?

Your contract covers the supply at a particular site, so moving does not end it by itself. Tell your supplier about the move as early as you can, and check whether your contract has a clause about leaving a site.

Ofgem’s change of tenancy guidance says you should tell the current supplier as soon as you can, with meter readings and evidence such as your lease. Our change of tenancy guide covers moving out and moving in step by step.

What happens if your supplier goes bust?

If your supplier fails, Ofgem appoints a new one and your supply carries on. Under Ofgem’s Supplier of Last Resort process:

• Ofgem aims to appoint the new supplier within a few days, and no more than 14 days.
• Your old contract ends. The supply licence requires every contract to end when a Last Resort Supply Direction takes effect.
• The new supplier puts you on a deemed contract, which lasts for as long as you want.
• You will not be charged exit fees, and you can shop around and switch.
• Business credit balances are not protected by Ofgem’s safety net. Contact your old supplier’s administrator about any credit.
• Ofgem’s advice is to take a meter reading and wait for the new supplier to contact you.

This has happened to business customers before. In November 2021 Ofgem appointed Pozitive Energy, now PE Solutions, to take on around 41,000 non-domestic customers of CNG Energy and CNG Electricity.

What should you do next?

1. Find your contract end date and any notice terms.
2. Ask for your exit fee in writing if you want to leave early.
3. Compare the fee with the saving from a new deal.
4. If you are near the end date, get quotes now so you are ready to switch. You can compare business energy quotes with us.

Frequently asked questions