Healthcare practice business energy

Dental practices, GP surgeries, vet clinics, physiotherapists and opticians all buy energy as businesses, usually from one or two small sites with steady daytime demand. Your contract is a standard commercial one, there is no Ofgem price cap, and VAT is normally charged at 20%. What changes the picture is the building arrangements: many practices rent a unit in a health centre where the landlord, not you, holds the energy contract.

What practices use energy for

Most practices have a predictable pattern: heating and cooling, lighting, computers and, for dental and veterinary clinics, equipment that may include compressors, suction pumps, sterilisers, X-ray units and, in vets, kennels and theatre lighting. Fridges for medicines and vaccines run 24 hours a day, which is why a practice that looks dark at night still has a base load. Gas typically runs the heating and hot water.

First question: who is the account holder?

Before you shop around, check who actually has the energy contract.

• You hold the account. You can choose supplier and contract, subject to your lease.
• Your landlord holds the account and recharges you. You cannot switch supplier, and the landlord's rules on resale are narrower than many people expect. See can landlords resell energy to tenants?.
• A management company supplies the building. Ask for copies of the bills that your charge is based on.

If you move into a new unit, you may find yourself on a deemed rate with the previous occupier's supplier. Choose a contract promptly; see moving premises and deemed contracts.

Micro or small?

A single-site dental or vet practice is nearly always a microbusiness: any one of fewer than 10 employees with turnover or balance sheet no more than €2m, electricity under 100,000 kWh a year, or gas under 293,000 kWh will do. A bigger group practice may be a small business (under 50 employees and turnover up to £6.5m, or electricity up to 200,000 kWh, or gas up to 500,000 kWh). Either way you can use the Energy Ombudsman if a complaint cannot be settled. See what extra protections microbusinesses get.

Worked example: a dental practice

A four-surgery dental practice uses 35,000 kWh of electricity a year and no mains gas. Using the micro-sized average fixed rate of 28.4p/kWh plus 58.0p/day (Moneysupermarket Business, 21 October 2026, an indicative comparison-site average):

Item	Sum	Cost
Units	35,000 × £0.284	£9,940.00
Standing charge	365 × £0.58	£211.70
Before VAT		£10,151.70
VAT at 20%	£10,151.70 × 0.20	£2,030.34
Total		£12,182.04

Daily use is 35,000 ÷ 365 = about 95.9 kWh, which is well above the 33 kWh a day limit for reduced-rate VAT, so 20% applies. A 1p/kWh change in the unit rate is 35,000 × £0.01 = £350 a year before VAT.

VAT: can you reclaim it?

This is where practices differ. HMRC's notice on health professionals (VAT Notice 701/57) says care provided by registered health professionals, including dental treatment, can be exempt, while work done purely for cosmetic reasons is standard-rated. A practice making mostly exempt supplies often cannot reclaim the VAT on its energy in full, which turns the 20% into a genuine cost. Veterinary care is not covered by that health exemption, so a vet practice that charges VAT on its services can normally reclaim VAT on its energy. Mixed practices (for example, private cosmetic work alongside exempt treatment) may be able to reclaim part. Because the rules depend on what you supply, ask your accountant. Our guide is reclaiming VAT on business energy.

The Climate Change Levy of 0.801p/kWh from 1 April 2026 applies to business supplies above the small-use limit: 35,000 × £0.00801 = £280.35 for our dental practice, if not already included in the unit rate. Use the VAT and CCL calculator to check.

Practical contract points

• Keep it simple. A fixed one- to three-year contract suits a practice with steady use. Check the early exit terms if you may move or merge.
• Plan for relocation. Ask your supplier whether your contract can move with you to new premises, and what it charges if not.
• Don't miss the renewal. Practice managers are busy. A lapsed contract can move you to a more expensive default rate, with no termination fee if you want out. See finding your contract end date.
• Broker fees. Any broker's commission must appear in the Principal Terms of your contract. Ask for it in writing.

Reducing use without affecting care

• Check that compressors and equipment are switched off or on standby overnight where manufacturers permit.
• Use LED lighting and presence sensors in storage and corridors.
• Review heating controls and ventilation settings with your landlord.
• Fit a smart meter or sub-meter to see weekend and night base load.

Never compromise refrigeration for medicines or infection-control equipment to save money.

Reading the bill for a small practice

Look at four things on every bill: the contract end date, the unit rate, the standing charge and the VAT line. If your supplier is charging you for a period that includes a meter estimate, send a meter reading and ask for a corrected bill. If you are a microbusiness, your supplier generally cannot back-bill you for energy used more than 12 months ago, unless you obstructed meter reads or there was tampering. See back-billing.

Moving or expanding

Practices often move into new units or extend into adjoining space. A new connection or meter takes time, so start early. See new business energy connection and setting up energy for a new business. If a partner leaves or the practice is sold, tell the supplier the date and take final readings.

Run your numbers through the business energy cost calculator before you phone a supplier, so you can tell whether a quote is in a sensible range.

Next steps

1. Confirm who holds the energy account and what your lease says.
2. Find your annual kWh and contract end date on the latest bill.
3. Ask your accountant how much VAT you can reclaim.
4. Compare at least two quotes, including broker fees if a broker is used.