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Scottish Business Cooperative
Scottish Business Cooperative
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Frequently Asked Questions

Please reach us at info@scottishbusinesscoop.org if you cannot find an answer to your question or speak to your local Cooperative membership director.

A micro business in energy refers to a business that meets one of the following criteria:


  • Uses no more than 100,000 kWh of electricity per year.
  • Uses no more than 293,000 kWh of gas per year.
  • Has fewer than 10 employees (or their full-time equivalent) and has an annual turnover or balance sheet of no more than £1.716m


Ask you advisor how we can help you reduce the amount of VAT you pay on your business energy bills.


 The Climate Change Levy (CCL) is an environmental tax imposed on businesses in the UK to encourage energy efficiency and reduce carbon emissions. It applies to businesses in sectors such as industrial, commercial, agricultural, and public services. 


How It Works:


Businesses pay the main rates of CCL on their electricity, gas, and solid fuels.


The levy is charged by energy suppliers and appears on business energy bills.


There are reduced rates for businesses that have entered into a Climate Change Agreement (CCA) with the Environment Agency.


Certain businesses, such as charities engaged in non-commercial activities, may be exempt.


Below are the CCL rates from 1 April 2024 to 31st March 2026 for Business Energy Supplies:


Electricity:  0.775p per kWh


Gas:  0.775p per kWh


A Letter of Authority (LOA) is a legal document that allows a business to authorize a third party—such as an energy broker or consultant—to act on its behalf when dealing with energy and water suppliers.


What does an LOA typically include?

Identification: Business details (name, address, registration number) and the authorized third party’s information.


Scope of Authority: Defines what the third party can do, such as negotiating contracts, handling billing inquiries, submitting meter readings, or organizing maintenance.


Duration: Specifies how long the LOA is valid—often 12 - 36 months but can vary.


Payment Terms: If applicable, outlines how the third party’s fees will be paid.


Signatures: Must be signed by an authorized person within the business (e.g., owner or director).


Different levels of LOAs exist, with Level 1 allowing limited actions (like requesting account details) and Level 2 granting broader powers, including signing contracts.


Would you like help drafting one?  Use our LOA generator tool (link on website footer)


A business water audit is a thorough assessment of a company's water usage to identify inefficiencies, reduce costs, and improve sustainability. It typically involves:


Usage Analysis – Reviewing water bills, meters, and operational processes to understand consumption patterns.


Leak Detection – Checking for leaks and inefficiencies in plumbing, equipment, and cooling systems.


Efficiency Recommendations – Suggesting ways to reduce water wastage through better practices or upgrades, such as installing water-efficient fixtures.


Compliance Check – Ensuring the business meets local regulations on water usage and wastewater management.


Cost Savings – Identifying areas where reduced consumption can lower utility bills.


Many companies perform water audits to improve environmental responsibility and cut expenses. Would you like to explore how your business could benefit from one?  Get in touch today and request a free desktop report.  We offer full fix & reclamation audits on a performance related basis. 


A Change of Tenancy (COT) in energy and water contracts happens when the ownership or occupancy of a property shifts—whether due to new tenants, business takeovers, or changes in lease agreements.


Here’s how it works:


For Businesses: If a company moves into a new premises or another business takes over an existing space, the energy and water suppliers need to be informed to update the contract details.


For Residential Properties: If a tenant moves out and a new one moves in, the supplier must be notified to ensure the new occupant is correctly billed.


Key considerations:


The outgoing party should provide final meter readings and settle any outstanding bills.


The incoming party needs to register their details with the supplier, potentially negotiating a new contract.


Suppliers may require proof of tenancy change, such as a lease agreement or completion statement.


If this is something you’re dealing with, we can help you understand the process further or even draft notifications for suppliers—just let us know what you need!


Typical Proofs required to process a COT:


Most suppliers will require the below documents as a minimum requirement to process a change of tenancy.  It is important to note that a change of tenancy is a general term used for both leased and purchased premises.


  • Copy of lease agreement
  • Mortgage completion letter
  • Solicitors letter confirming the lease or purchase of the property
  • ID may be requested by some suppliers
  • Copy of Rates bill
  • Details of outgoing tenant/owner may be requested if available


Members have access to a COT helpline to guide them through the process.


The PSTN switch-off refers to the retirement of the Public Switched Telephone Network (PSTN), which has been the backbone of traditional landline phone services for decades. In the UK, telecom providers are transitioning from analogue phone lines to digital technology, such as Voice over Internet Protocol (VoIP).


The switch-off is happening because the old network is becoming outdated and difficult to maintain. The transition is expected to be completed by January 2027. Businesses and consumers will need to move to digital alternatives to ensure continued service.


Would you like to know how this might affect you?  Contact the office or your local membership office and they will be able to discuss this in more detail.


An energy audit for a business is a systematic review of how your company consumes energy, aiming to identify inefficiencies and opportunities for cost savings. It involves analyzing electricity, gas, and other energy usage patterns across equipment, lighting, HVAC systems, and operational processes.


A professional audit typically includes:


Assessment of energy bills to understand consumption trends.


Inspection of equipment and facilities to spot inefficiencies or outdated systems.


Recommendations for improvements, such as switching to LED lighting, upgrading HVAC systems, or optimizing production processes.


Potential financial incentives, like government grants or tax breaks for energy-efficient upgrades.


Ultimately, an energy audit can lead to reduced energy costs, improved sustainability, and compliance with environmental regulations. If you're considering one for your business, the Cooperative can help you explore the steps to get started.


Under Ofgem's rules, energy suppliers cannot charge you for energy used over 12 months ago if:


You did not receive an accurate bill for that energy, despite asking for one.


You weren't informed about the charges in a statement of account.


Your Direct Debit was set too low to cover the full amount, and this wasn’t corrected.


However, if a customer has unreasonably obstructed the supplier—such as blocking access to their meter or ignoring payment requests—the supplier may issue a back-bill.


If you've received a back-bill that violates these rules, you can challenge it with your supplier and escalate the complaint to the Energy Ombudsman if necessary.


Would you like help drafting a complaint letter?  Contact your local Membership Director.


The De Minimis Rule in the UK commercial energy sector refers to the threshold below which businesses qualify for a reduced VAT rate on their energy consumption. This rule is particularly relevant for small businesses or premises with low energy usage.


VAT Reduction Under the De Minimis Rule

Under UK VAT regulations, businesses typically pay 20% VAT on their energy bills. However, if their energy consumption falls below the De Minimis threshold, they qualify for a reduced VAT rate of 5%. The threshold is defined as:


Electricity: Consumption of 145 kWh or less per day (4,397 kWh per month).


Gas: Consumption of 145 kWh or less per day (4,397 kWh per month).


Application of the Rule

The De Minimis Rule applies to businesses that meet the following criteria:


The energy consumption is below the threshold for a given billing period.


The business operates from a single premises or a set of premises that are considered one entity for VAT purposes.


The rule is automatically applied by energy suppliers when billing, ensuring eligible businesses receive the reduced VAT rate without needing to apply separately.


Impact on Businesses

For businesses with low energy consumption, the De Minimis Rule provides financial relief by reducing VAT costs. This is particularly beneficial for small enterprises, charities, and businesses with energy-efficient operations. Additionally, businesses that qualify under this rule may also be exempt from the Climate Change Levy (CCL), further lowering their energy costs.


For more details on VAT and energy billing, you can refer to the official HMRC guidelines on VAT for fuel and power and business energy VAT rates.


As part of our Bill Validation service, our team will check this and other areas where we can help reduce your business energy spend.


How to Manage a Change of Tenancy for Business Energy customers:


When taking over a new commercial property or leaving an existing premises, it’s crucial to handle your energy contract properly. Failing to notify your supplier about the tenancy change can lead to unexpected charges, service disruptions, or being placed on costly deemed tariffs. Follow this step-by-step guide to ensure a smooth transition.


1. Notify Your Energy Supplier


Contact your energy supplier as soon as possible—ideally at least 28 days before the tenancy change. This allows them to process your request efficiently and prevents any delays in supply.


You should provide:

  • Business name and contact details
  • Proof of tenancy or ownership
  • Planned tenancy change date
  • Final meter readings (if you're vacating)
  • Opening meter reads (if you're entering)


What proofs will be required for the Change of Tenancy (COT) process?


For Incoming Businesses (Moving in to the premises)


A copy of the lease agreement showing parties involved, particulars page and signatures OR Land Registry document with proof of purchase.


Some suppliers may also ask for a second proof which can be:


  • Copy of Business Rates for the property
  • Copy of Public Liability Insurance for the property
  • Copy of ID (Passport of Driving License)


For Outgoing Businesses (Moving out of the premises)


For outgoing businesses, you will be required to provide proof.  This can be one of the following:


  • Surrender of Lease
  • Completion statement 
  • Sale Contract
  • Solicitors letter


2. Understand Your Current Contract


If you’re an incoming tenant, check whether the property is currently under contract or if it has defaulted to a deemed tariff, which is usually more expensive. You can either take over the existing contract or negotiate a new deal.


If you’re an outgoing tenant, ensure your account is fully settled. Request confirmation from your supplier that your contract has been closed to avoid lingering charges.


Our experienced advisors will guide you through this process.


3. Conduct Meter Readings


A final meter reading should be submitted when vacating a premises, and a new meter reading should be taken on the day of occupancy if you’re the new tenant. This prevents disputes over energy usage.


Check whether your business uses:

  • Standard meters – Manually read and recorded
  • Smart meters – Automatically send data to your supplier
  • Half-hourly meters – Often used in high-consumption businesses


4. Avoid Expensive Default Rates


If you fail to register with a new supplier, your business might be placed on a deemed rate or out-of-contract tariff, which is significantly higher than negotiated rates. To prevent this:

  • Compare energy providers before moving in
  • Negotiate a fixed or flexible contract that suits your business needs
  • Consider renewable energy options if sustainability is a priority


Speak to your advisor who will assist with these processes.


5. Compare Energy Deals


Take time to compare business energy deals to secure the best rates. Factors to consider include:

  • Contract length
  • Standing charges and unit rates
  • Renewable energy options
  • Supplier reputation and customer service


The Scottish Business Cooperative can simplify the COT process and help secure competitive rates tailored to your business via a panel of carefully selected partners.


6. Ensure a Seamless Transition


For outgoing tenants:

  • Clear any outstanding balances before leaving
  • Submit final meter readings and confirm contract closure with your supplier
  • Keep records of communications with your provider


For incoming tenants:

  • Conduct an initial meter reading and register with a supplier immediately - your Scottish Business Coop advisor will assist with this.
  • Review contract terms and negotiate if needed.  Again the Coop have a panel of selected supply partners with exclusive rates for you to access.
  • Set up a direct debit or payment plan to avoid billing issues


Need Help with a Change of Tenancy?


At The Scottish Business Cooperative, we specialize in helping businesses transition their energy contracts smoothly while securing the best rates. Whether you’re moving in or out, our expert team is here to assist with contract transfers, supplier negotiations, and cost savings.


You can also use our quick and simple Change of Tenancy generator tool.


For Incoming Businesses (Moving in to the premises)


A copy of the lease agreement showing parties involved, particulars page and signatures OR Land Registry document with proof of purchase.


Some suppliers may also ask for a second proof which can be:


  • Copy of Business Rates for the property
  • Copy of Public Liability Insurance for the property
  • Copy of ID (Passport of Driving License)


For Outgoing Businesses (Moving out of the premises)


For outgoing businesses, you will be required to provide proof.  This can be one of the following:


  • Surrender of Lease
  • Completion statement 
  • Sale Contract
  • Solicitors letter


Copyright © 2025 Business Cooperative (Scotland) Limited - All Rights Reserved.   Incorporation No.   SC745726 

The Scottish Business Coop is a trading style of Business Cooperative (Scotland) Limited


Energy Ombudsman ADR Scheme Accredited

Membership Number:    C35BUSI155 

ICO Registration Reference:   ZB869440  


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