What Is a Deemed Rate and How to Avoid It
A deemed contract is what your supplier is allowed to charge when there is no live negotiated agreement—think of it as an emergency tariff with no loyalty discount. It is not illegal, but in 2026 it routinely lands at roughly 32–38p/kWh for smaller non-half-hourly electricity meters while a careful fix might sit nearer 24–28p/kWh.
Next step: If you use under about 50,000 kWh a year, you can get a quote in under 90 seconds online — fast, no obligation. Larger supply, half-hourly metering, or prefer chat? Use the contact page.
Key takeaways
- You are almost always deemed when a fixed contract ends, you move into new premises without setting up supply, or you refuse a renewal offer and drift past notice deadlines.
- If you meet Ofgem’s microbusiness tests—either under 100,000 kWh electricity or 293,000 kWh gas a year, or fewer than ten FTE staff with turnover/balance sheet under €2m—suppliers face tighter rules on endless rollovers and must give clearer renewal notices.
- Escaping deemed status needs a signed supply contract with a new start date—phone promises don’t switch the legal rate.
- If you challenge a back-bill, suppliers must follow the Energy UK/Vulnerability standards plus Ofgem billing rules; disputed sums under £5,000 can ultimately reach the Energy Ombudsman once internal complaint stages finish.
Why your coffee-shop bill suddenly jumped £240
Sarah runs a two-site café group near Bristol. Her EDF business rate was 25.4p/kWh until 31 January. Finance missed the 60-day termination email over Christmas. From 1 February the account fell onto deemed electricity at 36.1p/kWh with a 95p/day standing charge—numbers that were buried on page six of a generic “Out of Contract” leaflet, not the old contract PDF.
Usage sat at 2,800 kWh per month across both meters. The 10.7p swing equals £299 a month before CCL and VAT. That is not fraud; it is the price of letting deemed terms activate. The fix was boring but fast: digital signature on a new 12-month fix with E.ON Next at 26.8p/kWh, effective five working days after objector checks cleared.
How suppliers actually publish deemed numbers
British Gas Business, ScottishPower Business and the other “big six” descendants all publish PDF or HTML sheets listing deemed, default and sometimes tariff-specific rates by region. Rates track wholesale markets with a lag, so a spike in the NBP gas curve in March might not hit your deemed bill until May.
Gas deemed is quoted in pence per kWh just like electricity—expect roughly 7–12p/kWh for SMEs when futures are calm, climbing higher during cold snaps. Always compare the deemed sheet against your invoice line labelled “Unit rate” or “Out of contract rate”; if they diverge, raise a billing case before you pay.
Deemed vs rollover vs deemed “supply” invoices
Language trips people up. Use this grid when you read supplier letters.
| Label on letter | What it really means | Typical action |
|---|---|---|
| Deemed / out of contract | No active supply contract; supplier’s published default applies | Sign a new deal or initiate supplier switch (switching steps) |
| Rollover renewal | You stayed silent; supplier auto-extended often by 12 months | Check notice windows in rollover contracts |
| Deemed supply (new MPAN) | Local network energised the meter before you appointed a retailer | Appoint supplier fast or pay limited-period settlement rates |
Exit playbook that works with credit teams
Treat deemed recovery like a refinance. Gather your MPAN top line, last twelve months kWh, Companies House number, and bank statements if the supplier reopened a credit line. Brokers sometimes accelerate the process because they hold master agreements with risk teams, but you can go direct to SSE Business Solutions or Octopus Business if you prefer.
Never cancel a direct debit while still consuming—Ofgem treats that as a customer fault and suppliers can flag late payment fees. Instead, secure the new contract, confirm the switch date with both incoming and outgoing retailers, then dispute any overlap days if meter reads clash.
When to pick up the phone to Ofgem or the ombudsman
Ofgem itself rarely intervenes in an individual bill, but its enforcement work sets the tone suppliers must follow. If you believe the deemed tariff sheet was not published properly, log a case citing the specific licence standard—then escalate through the supplier complaint code to the Energy Ombudsman within the published time limit.
For practical reading on the clauses you should have signed instead of drifting onto defaults, open our companion pieces on how to read a business energy contract and what happens when your contract expires—together they stop the next deemed surprise.
What do you want to do next?
Browse more independent guides on the SwitcherMate Business energy hub. If you would rather speak with us about procurement or a complex site, use the contact page. For fast online comparison under typical small-use thresholds, you can also use our business quote tool where it fits your situation.