Are you using a domestic energy profile for your business? If so, there are considerable tax and insurance implications for your business. This article examines why these profiles exist, how to find out if you are using the wrong profile, what to do to change this and how a change would benefit the security of your future contracts.

Background

The original intention of all profiles was to structure pricing and consumption patterns to match the type of electricity usage. Simplistically 01 and 02 profile meters are intended for domestic properties whereas the commercial market starts off with 03 and 04 profiles, which are at the smaller end of business consumers and are typically ‘billed’ quarterly. 05 to 08 profiles inclusive are larger business consumers, billed monthly. There are still particular meters which might have upto 7 different rates based on time of day.The final profile the 00 or ‘half-hourly’ (the meter sends out via a radio signal, a reading every half hour). These are typically high use businesses.

Metering Evolution

As these profiles evolved historically, they have become relatively fixed to a meter. This sometimes needs attention if perhaps the nature of the business and its electricity consumption have changed over time. This is a ‘profile change’ and again is intended to match the pattern of metering to consumption. Another annoyance for some businesses is that some business suppliers won’t offer fixed price contracts to 01 and 02 meters even if they are truly premises used for business. This might prevent you locking in prices for a set price, needs considering.

Are you on a Domestic Meter?

• Your Supply Number will start with either 01 or 02 – these are the first 2 digitsof the Top Line (located directly next to the S on your bill) 01 Profile = Domestic Unrestricted, 02 Profile = Domestic Economy 7
• If a client moves into what used to be a domestic property they may still have a domestic profile meter, examples may be: Dentists, Solicitors, Vets and Farms

How does this affect you?

• A domestic profile may have VAT implications, sites will only be charged domestic VAT at 5% (instead of the 15% charged for businesses)
• Some suppliers will not price sites because they could be in breach of their license, i.e. they may only have a license for either domestic or commercial business, other suppliers may price the site if the client has other business sites that are being priced alongside this.
• In some cases suppliers are unable to agree a fixed term contract and these sites will be treated differently e.g. they may be affected by price increases if they are unable to agree to a fixed rate
• The client will not recieve the same range of flexible plans availble
• Termination Notices will not be required if you wish to change supplier unlike Business Profile Meters which can require up to 120 days notice to terminate.

If you feel that your meter profile is not sufficient for your needs, then you should discuss this with your current supplier. Your current supplier can arrange for work to be carried out, whether this be a profile upgrade or downgrade, however there will be a cost involved to you as metering work costs can vary depending on the complexity and time required.