Sudden £2,000 Energy Bill? Check the “12 Month Rule” Before You Pay

You open the envelope. Your stomach drops. It’s an energy bill for £2,000. The letter says: “Sorry, we realized we haven’t billed you correctly since 2023. Here is the catch-up bill.”

Do you have to pay it? Usually, no. Energy companies have a strict time limit on how far back they can chase you for their mistakes. It’s called the Back Billing Rule, and it could save you thousands.

What is the “Back Billing Rule”?

The regulator, Ofgem, banned suppliers from charging for energy used more than 12 months ago if the delay in billing is their fault.

• Example: It is January 2026. Your supplier realizes they forgot to bill you for all of 2024.

• The Outcome: They cannot charge you for the 2024 usage. They can only charge you for the energy used from January 2025 onwards (the last 12 months).

• The Balance: They must write off the older debt and remove it from your bill.

Whose Fault Was It? (The Vital Check)

This rule is designed to punish lazy energy companies, not dishonest customers. You are protected if:

• You requested a bill but never got one.

• The supplier had your correct meter readings but estimated your bill anyway.

• There was a system error on their side.

You are NOT protected if:

• You blocked access to the meter (e.g., locked gates) so they couldn’t read it.

• You behaved “unreasonably” (e.g., stealing gas or ignoring every letter they sent asking for a reading).

Step 1: Don’t Pay—Dispute It

If you receive a massive “Catch Up” bill that dates back years:

1. Do not pay it yet. Paying admits liability.

2. Contact them immediately (Webchat or Email is best for a paper trail).

3. Use this script:

   “I have received a catch-up bill dating back to [Year]. Under the Ofgem Back Billing rules, I am not liable for any energy used more than 12 months ago, as this error was not my fault. Please reissue the bill removing all charges older than 12 months.”

Step 2: The Complaint

If they refuse (or say “That rule doesn’t apply to us”—which is a lie, it applies to everyone):

1. Raise a Formal Complaint.

2. Wait 8 Weeks.

3. Go to the Energy Ombudsman. The Ombudsman is free and has the power to force the supplier to wipe the debt and even pay you £50-£100 compensation for the stress.

A Quick Story: Meet Gary

• The Shock: Gary moved into a new flat. He set up a Direct Debit, but British Gas only took £10 a month. He assumed it was cheap because the flat was small.

• The Bomb: Two years later, he got a bill for £3,400. The supplier said: “Your Direct Debit was too low, you owe us for 24 months of usage.”

• The Fight: Gary checked the Back Billing rule. He argued that the supplier had his meter readings but failed to adjust the Direct Debit.

• The Win: British Gas had to wipe £1,700 (the first 12 months of debt). Gary only had to pay for the most recent year, and they let him pay it off in installments.

Summary: Check the Dates

Before you panic at the total figure:

1. Check the dates of the energy usage.

2. Apply the 12-month limit.

3. Challenge the rest.

Frequently Asked Questions

Does this apply to Smart Meters?

Yes. In fact, it’s even stronger. If your Smart Meter was sending readings but the supplier’s system ignored them and sent you “Estimated Bills” for two years, that is their fault. They cannot back-bill you for anything older than 12 months.

I moved out 2 years ago, can they chase me?

If they send you a bill now for a house you left 2 years ago, and they never sent a bill at the time: No. The 12-month rule applies from when the energy was used, not when you lived there.

Does this apply to small businesses?

Yes. The rule protects “Micro-Businesses” (fewer than 10 employees) as well as residential customers. If you run a small cafe and get a surprise bill from 2023, you can challenge it.

(Sources: Ofgem – Back Billing Rules, Citizens Advice – Catch Up Bills)