How do I read my business gas bill?
Converting gas units to kWh
Readings given by your gas meter are a measurement of the volume of gas used, not the energy content. For this reason, it needs to be converted to kWh (unlike your electricity meter which gives you the kWh upfront).
These are the steps your gas supplier will use to convert gas units to kWh.This presumes you have a metric gas meter (which will have a reference to cubic meters on it) and not an imperial meter (which will refer to cubic feet). In the latter instance, multiply the units used by 2.83 before step 2.
1. Find the number of units used (difference between start reading and end reading)
2. Multiply this by the volume correction factor which is 1.022640
3. Take that figure and multiply by the calorific value of 39.3
4. Finally, divide by 3.6 to give the kWh
What are the main sections of the gas bill to look for?
The unit price is in pence per kWh. So for each kWh of gas your business uses, you pay this amount. It doesn’t matter how much gas you use per month, every kWh of gas will be charged at this rate, so the total figure will be higher, the more gas you use. Presuming you are in a fixed price contract, the unit price will stay the same for the contracted period.
The Standing Charge is a set figure that can be shown on your gas bill in different ways, depending on your gas supplier. Typically, it is shown in pence per day, but some suppliers will show this as £ per month. SSE bill in £ per quarter. Some business gas suppliers will not include a Standing Charge, and instead include this cost in the Unit Price. Again, the Standing Charge will not change during the course of the contract, and is not affected by the gas you consume. It is to cover the cost of metering and distributing gas across the networks.
Climate Change Levy (CCL)
This is a tax and is paid by businesses on all their energy use, with a few exceptions: businesses who use less than the nominal amount, charities, businesses who are on a 100% Green Tariff, and domestic properties. The Government introduced the tax in 2001 and the HMRC website shows the current Climate Change Levy charges.
All businesses pay 20% VAT on their gas bills, the only exceptions are charities and domestic properties who pay 5%.