Business energy contracts are drawn up for buildings with a business purpose. Factories and shops fall into this category, but also the house of a freelancer fits the bill. The price difference between a business and private energy contract stems from the amount and time at which energy is used. Most companies use a lot of energy and do so mainly during the day. Private customers use the most energy in the evening. If you opt for a business contract as a freelancer or small to medium business owner, you’ll pay a monthly fixed price, just like you would as a private contractor.
Is it a good idea to enter into a business energy contract?
Energy suppliers want us to enter into special business energy contracts and many freelancers and small to medium sized companies think these contracts are advantageous. But is this the case? In this article we’ll compare business and private energy contracts, meaning you can easily decide which option to go for.
What is business energy?
Which option is favorable?
We’ll be frank: business contracts aren’t necessarily cheaper than private contracts. There’s no need to terminate your contract, but beware. The rates for business contracts are usually higher than the ones for private contractors. The welcome bonuses are lower for business clients too. Useful to keep in mind as well, is that rates for business contracts are given excluding VAT. On private contracts the VAT is added for you.
What are the advantages of a business energy contract?
Opting for a business contract is a good idea if you or your company uses a lot of energy. You’re allowed to use 3 x 80 ampere as a small consumer within the business contract, for private small consumers this is 3 x 25 ampere. But it remains that the more the use, the higher the costs. Make sure to check if you really need the extra energy.
Another advantage of the business contract is that you’re eligible for tax reduction on the business section of your energy bill. As a freelancer working from home, it might be a good idea to compare the private and business energy contracts. You could alternatively also use a comparison website to see which option comes out cheaper. Watch out though! If your business is registered to your home adress, you’re not allowed to pay your total energy bill through your business contract. Only your business usage falls under the tax reduction that’s part of the business contract. Talk to your accountant to find out how this works exactly!
What about legal protection?
Private and business contracts also differ in the legal protection they offer. Private consumers are better protected than business customers. Private energy contracts, for instance, offer a reflection period. This means you have 14 days to terminate your contract, without it costing you anything. Fines for private customers are capped as well. Terminating a contract as a private customer before your contracted time is up can cost you up to a maximum of €125 per product. Fines on business contracts can be a lot more. Another downside to business contracts is that they can be extended without notice. The terms for freelancers using business contracts have recently been changed. They’re now offered the same legal protection as private customers.
Need to know quickly which contract will be most advantageous for you? Use this rule of thumb: If you use less than 5000 m³ of gas and 10.000 kWh of electricity, a private energy contract will be more economical.
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