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The Difference Between Business and Domestic Gas Tariffs

There is a difference between business and domestic gas tariffs. Business contracts are more bespoke and will depend on the size and industry of the business. While the cost of domestic contracts is typically lower than the costs for businesses, it can be difficult to find a suitable deal for a business. Here’s a guide to business gas deals. Hopefully, this will give you an idea of the differences between these two types of contracts.

VAT Rate

The biggest difference between business and domestic energy tariffs is the VAT rate. A business will pay a higher VAT rate for its energy than a domestic customer. A 20% VAT rate will make business gas and electricity rates appear higher than domestic rates. This is because businesses are required to pay VAT on their energy bills. A domestic customer pays a 5% VAT rate. Charities and other organizations can also qualify for a reduced rate of VAT.

Energy Bill

A business’s energy bill will be higher than the average household’s, so it’s essential to shop around to compare business and domestic energy tariffs. The difference between business and domestic gas tariffs is often reflected in the unit rate. A fixed unit rate will mean a set amount of money for a fixed period of time. And because of this, you won’t have to worry about finding the cheapest deal.

Price

Another difference between business and domestic energy tariffs is the price. The price of business gas is lower because the energy is bought in bulk. A fixed rate means you won’t be paying more than you have to. And since business energy bills vary throughout the day, a fixed price will allow you to budget accordingly. This makes it easier to compare prices in the future. However, it’s worth remembering that you cannot change your mind during a contract.

Type Of Contract

The most significant difference between business and domestic gas tariffs is the type of contract. A business is likely to have different needs than a household. A business’s energy usage will be different from a house, so the price of a business gas contract will vary accordingly. While business and domestic gas tariffs are similar in many respects, a business is likely to have more energy usage than a home.

In Summary

While the price of domestic energy is largely fixed, business energy tariffs are more expensive. Businesses usually need more energy than a household. The difference in price between business and domestic energy tariffs is that businesses pay more VAT. For example, a business can get a discount on its electricity bill if it uses a cheaper gas tariff. In addition, business gas tariffs are less expensive than domestic prices.

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