Business Energy Costs in Sussex: What the October 2026 Changes Mean for Your Bill

Your Sussex office energy bill has no Ofgem price cap. October’s VAT cut probably won’t change it either. So what does control the cost?

It’s an easy distinction to miss. The headline says energy bills are rising, then says VAT on electricity is falling. If you’re running a consultancy in Brighton or an office-based business near Shoreham, you’d reasonably want to know which figure to put in your budget. The answer depends on whose bill the headline describes.

The changes that began on 1st October 2026 mainly concern households. Business energy contracts work differently. Once you’ve separated the two, there are more useful things to check than the next household price-cap announcement.

What actually changed on 1st October?

For a typical household paying by direct debit, Ofgem raised its energy price cap by 4%, from £1,663 to £1,723 a year. That’s a rise of about £60 a year at the consumption level Ofgem uses for its illustration. It isn’t a maximum bill: a household that uses more energy can still pay more.

Ofgem links the October rise to higher wholesale gas prices. The capped domestic gas unit rate moved from 7.33p to 7.97p per kWh, with 5% VAT included in both periods. For July to September, the capped domestic electricity rate was 26.11p per kWh with a 57.19p daily standing charge. For October to December, it was 26.32p per kWh with a 54.83p daily standing charge. The earlier electricity figures include 5% VAT, while the October figures exclude VAT and can’t be compared directly with the earlier figures. Those are domestic cap figures, not rates a business supplier must offer.

At the same time, the government temporarily replaced the reduced 5% VAT rate with a zero rate on qualifying electricity in Great Britain, from 1 October 2026 to 30 June 2027. The Budget extended the measure by three months. Domestic gas remains at 5% VAT. Qualifying electricity in Northern Ireland is still at 5%, with relief expected there from April 2027.

Put those headlines side by side and they sound like a complicated change to your energy bill. For a typical Sussex SME on a business contract, they aren’t. Your supplier isn’t recalculating your rate against Ofgem’s household cap, and the electricity VAT cut doesn’t turn a standard-rated business supply into a zero-rated one.

Why the household cap and VAT cut usually miss your business

The price cap covers domestic default tariffs

Ofgem’s price cap sets limits on unit rates and standing charges for domestic default tariffs. It doesn’t cap a non-domestic electricity or gas contract. A Sussex business may agree fixed rates with a supplier, pay variable rates under its contract or end up on more expensive out-of-contract terms. None of those rates is limited by the household cap.

That makes the household announcement useful context, but a poor budgeting tool. If your office electricity price is due to change, the documents to read are your own contract and renewal notice. An EDF guide to the business energy price cap confirms that small businesses aren’t covered by the domestic protection.

The broad business bill support firms may remember from the energy crisis has ended: the government’s Energy Bills Discount Scheme closed on 31st March 2024. That doesn’t mean every business faces the same rate. It means your bill comes back to the deal you have and the charges attached to it.

The VAT change is narrower than the headline

The temporary zero rate applies to electricity supplies that already qualified for the reduced rate. HMRC says the supplies eligible for relief have not changed. This includes domestic and certain charitable uses, as well as supplies below its de minimis electricity threshold: an average of no more than 33 kWh a day or 1,000 kWh a month. From 1 November 2026, the de minimis rule won’t cover electricity supplied at a workplace EV charging point, however little you use.

That last rule matters to a genuinely low-use business. It explains why Ofgem says the relief also applies to some small businesses. Business use alone doesn’t rule a supply out. Equally, being an SME doesn’t automatically qualify it. The question is whether the electricity supply meets the existing reduced-rate rules.

An ordinary business supply that is standard-rated remains subject to standard-rate VAT. If a VAT-registered business can recover input VAT, it should distinguish the amount paid on the invoice from its cost after recovery. For a qualifying reduced-rate supply, the temporary zero rate can reduce the amount paid upfront; if the business would otherwise have reclaimed that VAT in full, it isn’t the same as a lasting saving. A business that can’t reclaim VAT may feel the reduction directly.

If you’re unsure which treatment applies, check the VAT line on your electricity bill and the supply’s usage with your supplier or accountant. It’s a better question than asking whether “business VAT” has been cut, because there isn’t one answer for every business meter.

What the Budget means for your office energy bill

The 28th October 2026 Budget offers no direct energy bill discount for your office unless its low-use supply already qualifies for the longer VAT relief described above. Its biggest business energy measure, the British Industrial Competitiveness Scheme, starts in April 2027. It gives over 10,000 energy-intensive manufacturers an electricity discount of up to 25%. It isn’t aimed at offices like ours in Sussex.

The government has asked Ofgem to remove gas standing charges from domestic bills. It aims to do so by the close of 2027, or at the earliest opportunity afterwards. A Treasury spokesperson told Energy Advice Hub the government currently has no plans to lower or scrap business gas standing charges. Electricity standing charges will also be reformed, with details next year, but we don’t know who’ll be covered, so don’t plan around it. Household headlines still don’t settle your office bill. We’d watch your contract and renewal date.

What really drives business energy costs in Sussex?

Your postcode doesn’t determine whether the domestic cap protects you. Your contract, meter and premises determine what you pay. For an office-based SME, these are the costs worth examining.

The daily charge arrives whether the office is busy or quiet. In October, micro-business fixed electricity averaged 28.4p per kWh with a 58.0p daily standing charge. The small-business unit rate was lower at 27.2p per kWh, but its standing charge was 118.9p a day. It shows why a quote with an attractive unit rate needs a second look. The meter costs money before anyone switches on a screen.

Your contract status can change the arithmetic sharply. Compare the micro-business fixed figures above with the out-of-contract rate of 40.0p per kWh and daily standing charge of 254.0p. Those are market snapshots, not a promise of the quote your business will receive. They make the risk of overlooking a renewal date plain enough.

The unit rate is only part of the bill. Network costs, policy charges and other non-commodity costs are built into business energy pricing. A British Gas guide says these can account for more than three-fifths of a business energy bill; another market analysis puts them at around 60–64% of a typical business electricity bill. Treat that as a rough indication, not a fixed share for your office. Switching supplier can improve a quote, but it won’t make those underlying costs disappear. The Budget holds back new policy costs on energy bills until the 2027 spending review brings in the Cost Control Framework, except where they lower bills or are essential to keeping supply secure. It also holds the main rate of the Climate Change Levy on electricity at its 2027-28 level for 2028-29, but neither change takes existing charges off today’s bill.

Wholesale movements still matter. Business prices can respond to changes in the wholesale market, particularly when a contract is renewed or a variable rate changes. Cornwall Insight has reported rising business energy contract costs in 2026. Its model describes a much larger electricity user than a small Sussex office, so its headline percentage shouldn’t be applied to your next bill. The useful point is the exposure: a fixed contract may give you certainty for its term, while the price available at renewal depends on the market then.

Finally, your key date is your renewal, not Ofgem’s announcement. Cornwall Insight forecasts another rise in the household cap in January 2027. That is a forecast about domestic tariffs, not a prediction of what your supplier will charge your business. For you, the dates to put in the diary are the end of your deal and any notice window. Less exciting than a national headline, admittedly, but considerably more useful.

How an all-inclusive office changes the calculation

There’s another way to remove the uncertainty from your office energy budget: rent space where you aren’t the energy account holder.

At JetSpace’s 23 Grand Parade offices, the licence fee includes power, heating, buildings insurance and high-speed fibre broadband. You have a known monthly premises fee instead of arranging a separate electricity supply for that office, comparing its standing charges and managing its renewal. Whether you’re planning space in central Brighton or considering a move across Sussex, that’s a meaningful difference in how much admin lands on your desk.

Energy hasn’t become free. We still have to buy it, and you pay for the serviced office through the monthly fee. The useful distinction is which costs you need to predict separately. If the included services meet your needs, an unexpected change in an office electricity tariff isn’t another line for your business to absorb that month.

Keep the comparison honest. Our availability information describes the included services and quotes licence fees plus VAT. Business rates shouldn’t be assumed to be included in the fee; check the position for the specific space and whether your business qualifies for relief. From April 2027, the full Small Business Rates Relief threshold rises to £18,000, with tapered relief up to £21,000 for eligible properties in England’s retail, hospitality and leisure sectors, so an office shouldn’t count on the increase. When you compare premises, put the serviced fee beside the full cost of a conventional lease, including energy, broadband, any service charge and any business rates payable. Our guide to choosing a serviced office in Sussex offers a useful starting point for that conversation.

You may decide a direct lease suits you better. What matters is comparing costs you’ll actually pay, rather than a headline rent on one side and an inclusive monthly fee on the other. That’s how you avoid discovering the cheaper-looking office has a rather expensive plug socket.

Five practical checks before your winter energy bills arrive

1. Find the contract end date and notice terms. Open your latest business energy agreement, then record when you can review or leave it. Don’t rely on the date printed on your most recent invoice. If you have separate electricity and gas contracts, check both. Give yourself time to request alternatives before a decision becomes urgent.

2. Check what happens when the deal ends. Ask your supplier what rate would apply if you took no action. Out-of-contract electricity rates in the October market comparison were substantially higher than its fixed-deal figures. Your own terms are the ones that govern your bill, but the comparison is a good reason to diary the decision, not merely the expiry.

3. Compare the whole quote. Put expected annual consumption into each offer and look at the unit rate, standing charge, contract length and any other stated charges together. Ask the supplier to explain what sits behind the price. A lower pence-per-kWh figure may be less attractive once the daily charge is included, especially for an office that uses relatively little electricity.

4. Check whether your electricity gets the correct VAT treatment. If usage is low, ask whether the supply falls within HMRC’s 33 kWh-a-day or 1,000 kWh-a-month de minimis rule. If it does, ask whether the temporary zero rate is reflected on qualifying bills during the relief period. If you’re VAT-registered, check what you can reclaim before treating a lower VAT line as a saving.

5. Price the premises, not just the power. If a move is already on your mind, compare a lease with a serviced office using the same list of costs. Include utilities, broadband, insurance, rates where payable and the time spent managing separate contracts. You can find more ideas in our guide to small-business cost savings. A predictable monthly fee may be worth more to your business than the lowest possible price in a particularly good month.

For Sussex SMEs, the October headlines are a reminder to read the small print attached to the word bill. The household cap can signal what’s happening in the wider market, but it won’t settle a business invoice. Your most useful moves are closer to home: know your contract, check the VAT treatment and decide how much energy-price uncertainty you want attached to your office.

That habit of reading the small print is the same one that protects you on the other side of the ledger, as our guide to the new late payment rules makes clear. And for a wider view of where government policy points next, our piece on the industrial strategy covers the energy promises made for 2027.

If you found this useful, you might also enjoy our guides to the state of Sussex small business, choosing a serviced office in Sussex and small-business cost savings.