You're a microbusiness for energy if you have fewer than 10 employees and turnover or balance sheet of no more than £2 million, or use no more than 100,000 kWh of electricity or 293,000 kWh of gas a year. That status gives you protections larger businesses don't get.
Many small premises pass on the usage test alone, whatever their headcount. Since late 2024 there's also a wider "small business" group with some of the same rights. Here's what each status gets you, and what it doesn't.
As of 5 October 2026. General information, not legal or financial advice.
How do you know if you're a microbusiness or a small business?
Ofgem uses two definitions. You only need to meet one of the tests in each.
| Test | Microbusiness | Small business |
|---|---|---|
| Staff and money | Fewer than 10 employees (or full-time equivalent) and turnover or balance sheet total no more than £2 million | Fewer than 50 employees (or full-time equivalent) and turnover no more than £6.5 million or balance sheet total no more than £5 million |
| Electricity use | No more than 100,000 kWh a year | No more than 200,000 kWh a year |
| Gas use | No more than 293,000 kWh a year | No more than 500,000 kWh a year |
Source: Ofgem and the Energy Ombudsman, as of October 2026.
The usage test is the easy one to check. Your annual consumption (often shown as "AQ" for gas or "EAC" for electricity) is on your bill or contract. If you have several sites with one supplier, ask the supplier how it applies the test to your account.
You don't need to register as a microbusiness. It's a fact about your business, but it helps to tell your supplier or broker, in writing, that you think you qualify.
What extra rights does a microbusiness get on its contract?
Ofgem says suppliers must, for microbusinesses:
- give clear information about your contract (its "principal terms": price, length, how to end it)
- tell you your renewal prices before your contract ends. Citizens Advice says the supplier should contact you about 3 months before the end
- limit the notice you must give to end an evergreen (rolling) contract to 30 days
- acknowledge your request to end a contract within 5 working days
Citizens Advice adds two points that matter at renewal:
- If your contract has a rollover period, it can't be longer than 12 months.
- If you're in a rollover period or on an out-of-contract rate, you don't need to pay a fee or give notice to switch. These rates are usually very expensive, so it's worth moving. Our guide to fixed, flexible, deemed and out-of-contract energy explains the differences.
Is there a 12-month back-billing limit for microbusinesses?
Yes. Ofgem's 2018 back-billing decision stops suppliers billing microbusinesses for energy used more than 12 months before, subject to some exceptions. The main one: it doesn't protect you if your behaviour was "obstructive or manifestly unreasonable".
So if you get a catch-up bill covering years of usage, the older part may not be payable. Our guide on disputing a business energy bill covers how to challenge it.
What protections do you get with an energy broker?
Brokers are usually paid commission by the supplier, which comes out of what you pay. Since 1 October 2024, under Ofgem's non-domestic market review, suppliers must clearly show broker fees on contracts. Citizens Advice says that if you're a microbusiness, the broker has to tell you how much the supplier pays them before you agree, and the supplier must tell you the total your broker gets for setting up the contract.
Ofgem also decided that suppliers should only work with brokers that are members of a redress (complaints) scheme, from no sooner than December 2024. So if a broker misleads you, there's somewhere independent to take it.
Our guide to checking a broker before signing has questions to ask.
Can you complain to the Energy Ombudsman?
Yes, if you're a microbusiness or a small business under the tests above. The Energy Ombudsman's service is free. You must first complain to the supplier or broker and give them 8 weeks, unless they send you a "deadlock" (final response) letter sooner.
Citizens Advice can also help microbusinesses and small businesses with energy problems. Ofgem has required suppliers to signpost microbusinesses to Citizens Advice since 1 July 2024, and small businesses since December 2024.
What applies to every business, whatever its size?
Since 1 July 2024, Ofgem's Standards of Conduct (its rules on how suppliers behave towards customers) apply to businesses of any size, not just micro and small ones. If a supplier's conduct falls short, quote them in your complaint.
What doesn't change if you're a microbusiness?
Some protections household customers have don't apply:
- No cooling-off period. Citizens Advice and Ofgem both say there's no cooling-off period after you agree a business energy contract.
- Verbal agreements are binding. If you agree a contract on a recorded call, you've agreed it. See agreed a contract over the phone?
- No price cap. Business energy isn't covered by the household price cap, so prices depend on what you agree.
What to do next
- Check your annual kWh on your bill or contract against the table above.
- If you qualify, tell your supplier and any broker in writing that you're a microbusiness (or small business).
- Note your contract end date and any notice period. Look for your renewal prices before it ends.
- Before signing through a broker, ask what commission they'll be paid and check it's shown on the contract.
- Got a bill for energy used over 12 months ago? Ask the supplier to apply the back-billing rule.
- Unresolved complaint after 8 weeks, or a deadlock letter? Take it to the Energy Ombudsman.
- Use our estimator to see whether your current rates look reasonable.