What is on a business gas bill?
A UK business gas bill is four kinds of cost printed as one number: the gas itself, the pipes that carried it, one levy, and tax. Before any rate is applied, the meter reading has to become energy. The meter records volume, the bill charges kilowatt hours, and the conversion uses two published figures: a correction factor fixed by regulation, and the calorific value of the gas that flowed.
That conversion is set out in law rather than left to the supplier, so it can be reproduced from figures the invoice already prints. The rest of the bill is shorter than an electricity one, because almost none of the electricity policy levies reach gas at all.
- Volume correction factor
- 1.02264
- Fixed by regulation for a supply not expected to exceed 732,000 kWh a year. It is the calorific value that moves, not this.
- Billing calorific value, LDZ EA
- 39.7
- Megajoules per cubic metre: the mean of the 31 published daily values for East Anglia across August 2026, truncated to one decimal place.
- Climate Change Levy, per kWh
- 0.801p
- The gas main rate for 2026/27, the same figure as electricity since April 2024. It rises to 0.827p on 1 April 2027.
Four kinds of cost, and one of them is nearly empty
A gas bill divides the same four ways as a business electricity bill: the commodity, the networks, the levies, and tax. What sits inside each is almost entirely different, and one holds a single item.
1. The gas
The wholesale cost plus supplier margin, per kWh. This is the part your contract negotiates, and the only part a different supplier would quote differently.
2. The transportation
The pipes, in two layers: the national transmission system and the local distribution zone. Charged partly on the energy you took and partly on the peak day capacity your supply point reserves, at rates published annually.
3. The levy
Singular. The Green Gas Levy funds biomethane injected into the grid, charged per gas meter per day. There is no gas equivalent of Contracts for Difference, the Renewables Obligation, the Feed-in Tariff, the Capacity Market or the electricity network and balancing charges.
4. The tax
The Climate Change Levy at the gas rate, and VAT on top of everything including the levy. So your supplier sets one of the four and nobody you can negotiate with sets the other three, which is the conclusion the electricity bill reaches too.
Why the meter reads cubic metres and the bill charges kWh
A gas meter is a volume counter. It cannot know how much energy passed through it, because that depends on what the gas was made of, which varies by source and by day. The conversion happens afterwards, by the method the Gas (Calculation of Thermal Energy) Regulations 1996 set out.
The registered volume corrected to a common temperature and pressure. Below 732,000 kWh a year, that is the reading multiplied by 1.02264.
The mean of the published daily values for your Local Distribution Zone across the gas days billed, truncated to one decimal place.
Regulation 3(1) gives the same formula over 105.5 for therms, which is why an older bill reads in therms.
The correction factor is a defined term in the regulations, not a supplier convention, and 1.02264 is the figure below the 732,000 kWh a year threshold. Above it, the factor becomes a site-specific calculation of temperature, pressure and compressibility built on a standard temperature factor of 1.0098, and a site with a volume corrector skips it entirely. The calorific value is the only term that changes.
Imperial meters
An older meter registers in hundreds of cubic feet. Regulation 2(2) construes a cubic feet reading as that reading multiplied by 0.0283, so one hundred cubic feet is exactly 2.83 cubic metres for billing.
The calorific value, and the days it was measured over
National Gas determines a daily calorific value for each of the thirteen Local Distribution Zones and publishes it, rounded to one decimal place, the day after the gas day. Your bill uses the mean of those values across the gas days it covers.
The averaging rule has a detail in it that costs money. Regulation 3(2) adds the daily values, divides by the number of gas days, then ignores any amount of less than 0.1 megajoules per cubic metre. That is truncation, not rounding. Ofgem wrote to suppliers on 5 August 2014 to say so: rounding the average, or carrying more than one decimal place, is not consistent with the regulations, and neither is a fixed value.
- Published daily values, LDZ EA, 1 to 31 August 2026
- 31 gas days
- Sum of the published dailies
- 1,233.2 MJ/m³
- Mean, before the statutory step
- 39.780645 MJ/m³
- Truncated to one decimal place, per regulation 3(2)
- 39.7 MJ/m³
- What rounding would have given instead
- 39.8 MJ/m³
A tenth of a megajoule is a quarter of one per cent of the calorific value, and it multiplies through to every kWh billed. The zone matters as much: the same calculation across the same 31 days gives 39.1 megajoules per cubic metre in the South East and 40.6 in the North West. The Local Distribution Zone is a property of the supply point, not something to infer from the postcode.
Transportation: the distribution zone and the national system
Transportation is the gas equivalent of distribution and transmission charges, and built the same way: a national layer and a local one, each with a capacity element and a throughput element.
National Gas Transmission sets the national charges under the Uniform Network Code, on a charging year running 1 October to 30 September, published around the end of May: for the year from 1 October 2026, entry capacity at 0.1259 pence per kWh per day and exit capacity at 0.0356. Your gas distribution network sets the local charges under the same code, at least 60 days ahead, running 1 April to 31 March. Those are the rates a business sees, because the network recovers its own costs and the exit capacity it bought on your behalf through one set of lines.
One national charge never reaches those lines, and it is the one most likely to be missed. The General Non-Transmission Services charge recovers what National Gas spends on everything that is not the transmission service itself, and Section Y of the Uniform Network Code sets it as a uniform rate, independent of which entry or exit point the gas used. It is payable on gas allocated to shippers at entry and again at exit, so a shipper meets the same rate at both ends of the journey: 0.0206 pence per kWh at each end for the year to 30 September 2026, and 0.0213 for the year from 1 October 2026, made final in the notice of 31 July 2026 after an indicative 0.0212 in May. Your distribution network does not bill it, which is why no gas invoice carries a line called General Non-Transmission Services. It reaches you inside the unit rate on a fixed contract, or as a pass-through element on a flexible one.
| Line on the bill | Code | What it pays for | Published rate |
|---|---|---|---|
| LDZ system capacity | ZCA | The local distribution network, charged on the peak day capacity the supply point reserves rather than on what flowed. | 0.2347p per peak day kWh, per day |
| LDZ customer capacity | CCA | The customer-specific element of the same charge, on the same capacity basis. | 0.0055p per peak day kWh, per day |
| NTS exit capacity | ECN | The national transmission system, recovered by the distribution network and varying by exit zone. | 0.0358p per peak day kWh, per day, zone EA1 |
| LDZ system commodity | ZCO | The throughput charge, on the energy actually transported. | 0.0436p per kWh |
| LDZ customer fixed | CFI | A flat daily charge for the supply point, higher for a monthly read site than a non-monthly read one. | 52.0687p per day, monthly read |
| Unidentified gas | UIG | The difference between gas measured into a zone and gas allocated to meters in it, shared among shippers. | No published tariff, allocated by contract |
| Green Gas Levy | GGL | The Green Gas Support Scheme, which pays biomethane producers for gas injected into the grid. | 1.046p per meter per day for 2026/27 |
Those rates are the band for a supply point taking 73,200 to 732,000 kWh a year. Above 732,000 kWh the rate becomes a formula that falls as reserved capacity rises. Both boundaries are the 2,500 and 25,000 therm thresholds that also decide which correction factor applies, so a site can cross the two at once. Rates vary by network: the same statement prices mid-band system capacity at 0.2347 pence in East of England and 0.3158 in London.
The Climate Change Levy and VAT, on gas
Both taxes work on gas as they work on electricity, so this is short. The Climate Change Levy main rate on gas is 0.801 pence per kWh for 2026/27, rising to 0.827 on 1 April 2027. That is the same figure as electricity, and has been since the two converged in April 2024, but it is published as its own rate and can diverge. A Climate Change Agreement discounts it by 89%, against 92% on electricity. Which reliefs remove the levy is set out in the Climate Change Levy guide. It lands harder than the identical rate suggests, because gas costs far less per kWh, so 0.801 pence is a much larger share of the unit rate.
VAT is 20% for most businesses, with 5% for qualifying use and small supplies. The gas de minimis is its own: not more than an average of 5 therms or 145 kWh a day, or 150 therms or 4,397 kWh a month, to one customer. Electricity is 33 kWh a day and 1,000 kWh a month, so a business can sit under the threshold on one fuel and over it on the other at the same premises.
A month of gas, from the reads up
The chain on one supply point, on published figures throughout. The site is on Cadent East of England, in zone EA and NTS exit zone EA1, billed for gas days 1 to 31 August 2026.
- Volume registered on a metric meter, assumed
- 4,500 m³
- Converted volume, 4,500 × 1.02264
- 4,601.88 m³
- Billing calorific value, LDZ EA, August 2026
- 39.7 MJ/m³
- Energy billed, (4,601.88 × 39.7) ÷ 3.6
- 50,748.51 kWh
Two more assumptions price the rest. Annual Quantity of 600,000 kWh puts the site in the 73,200 to 732,000 kWh band, below the threshold at which 1.02264 stops applying; peak day capacity is 4,000 kWh a day. Gas demand is seasonal, so an August month is not a twelfth of a year.
- LDZ system capacity, 0.2347p × 4,000 × 31 days
- £291.03
- LDZ customer capacity, 0.0055p × 4,000 × 31 days
- £6.82
- NTS exit capacity, 0.0358p × 4,000 × 31 days
- £44.39
- LDZ system commodity, 0.0436p × 50,748.51 kWh
- £22.13
- LDZ customer fixed, 52.0687p × 31 days
- £16.14
- Green Gas Levy, 1.046p × 31 days
- £0.32
- Climate Change Levy, 0.801p × 50,748.51 kWh
- £406.50
- Total, before the gas itself and before VAT
- £787.33
Two things fall out of that. The Climate Change Levy, at £406.50, costs more than every transportation line put together, at £380.51, which is not the intuition anyone brings from an electricity bill. And every figure except the three assumptions came from a published document, so all of it is reproducible without the invoice.
One cost is deliberately absent from that total. The General Non-Transmission Services charge falls on the shipper rather than on the network, so no invoice line carries it, and putting it into a total of billed lines would misstate what the invoice says. It is still real money on this gas. August 2026 sits inside the gas year to 30 September 2026, so the rate is 0.0206 pence per kWh at each end.
- Exit leg, 0.0206p × 50,748.51 kWh
- £10.45
- Both ends, entry allocation assumed equal to exit
- £20.91
The entry leg is not allocated against this meter, which is why the second line is an assumption rather than a reading: the shipper put in as much gas as came out, true to within what the system loses in transit. Set against £380.51 of billed transportation the amount is small. It is worth knowing anyway, because it is the part of the transportation cost that no invoice will ever show you.
Everything on an electricity bill that never reaches gas
This is the most useful thing to carry between the two invoices. The policy levies that make up a growing share of a business electricity bill are defined on electricity supplied, and not one appears on a gas bill under any name.
- Commodity, the gas itself, at the contract unit rate per kWh
- Transportation, LDZ capacity and commodity, NTS exit capacity and the customer fixed charge
- GGL, the Green Gas Levy, 1.046p per meter per day for 2026/27
- CCL, the Climate Change Levy at the gas rate, 0.801p per kWh
- VAT, 20%, or 5% on a qualifying use or a small supply
- Contracts for Difference, A levy on electricity suppliers per MWh of electricity supplied.
- Renewables Obligation, Discharged in certificates against electricity supplied.
- Feed-in Tariff, Levelised across suppliers by share of electricity supplied.
- Capacity Market, Charged on electricity demand inside winter peak half hours.
- Nuclear RAB, Recovered from electricity suppliers per MWh supplied.
- AAHEDC, A charge on GB electricity demand, for electricity distribution in Scotland.
- DUoS, TNUoS and BSUoS, Electricity network and balancing charges. Gas has transportation instead.
A gas invoice carrying a line called CfD, RO, FiT, Capacity Market, AAHEDC or BSUoS has something wrong with it. The asymmetry runs through reliefs too: an energy intensive industries certificate does nothing to a gas bill, because there is nothing there for it to remove. A Climate Change Agreement, the relief people confuse it with, does.
How to check it
A gas bill has fewer lines than an electricity one, and one is unique to gas and unusually error prone. Work in this order: a failure early makes everything after it wrong without looking wrong.
- Identity. Is the meter point reference the supply point you think, and the Local Distribution Zone the zone the site is in? A wrong zone gives a wrong calorific value and a wrong exit capacity rate.
- Period. Do the gas days billed abut the last period without a gap or overlap? Every daily charge, and the calorific value average, follows from that count.
- Reads and volume. Does closing read minus opening read equal the volume stated, in register units, and is the read actual rather than estimated?
- Conversion. Does the stated volume, correction factor and calorific value recompute to the stated kWh? Nobody runs this check, and it is arithmetic on figures already on the page.
- Calorific value. Does it match the truncated mean of the published dailies for that zone across those days? A fixed value repeated month after month is a flag on its own.
- Rates and tax. Do the transportation rates match the published statement for that network, year and band, do the capacity lines use the capacity on record, and is the levy at the gas rate?
What is changing
Distribution charges rose steeply on 1 April 2026
Cadent published year-on-year distribution price rises of 24.7% in East of England, 22.9% in London, 19.9% in the North West and 28.0% in the West Midlands, driven by higher allowed revenue under the RIIO-3 final determinations of 4 December 2025 and a fall in demand of around 2%. Falling demand over a fixed revenue requirement raises the unit rate for everyone left, and that pattern will repeat.
Two charging years, at different times
NTS charges run October to September, so a gas bill sees two charging year changes in twelve months, from different publishers. Exit capacity rises from 0.0299 to 0.0356 pence per kWh per day on 1 October 2026, the General Non-Transmission Services charge from 0.0206 to 0.0213 pence per kWh on the same date, and the Climate Change Levy on gas from 0.801 to 0.827 pence per kWh on 1 April 2027.
Deep dives and edge cases
These come up often enough to answer, not often enough to interrupt.
Annual Quantity, Supply Offtake Quantity, and which one prices whatTwo capacity numbers on one supply point, doing different jobs.＋
Annual Quantity estimates how much energy the supply point takes in a year, and decides which transportation band it falls into and how often it is read. Supply Offtake Quantity is the peak day capacity reserved for it, in kWh a day, and it is the quantity the capacity charges multiply. They move independently, so a site whose demand has fallen can be paying against a peak day figure set when the building ran differently, which is the gas analogue of an agreed capacity nobody has revisited.
Unidentified gas, and why it appears on some contracts and not othersA shared error term with no published tariff.＋
Gas measured into a distribution zone never quite equals gas allocated out of it to meters. The difference covers leakage, theft, meter error and estimation for sites not read daily, and is shared among the shippers in that zone. There is no published rate, because it is an allocation rather than a tariff. A fixed contract absorbs it into the unit rate; a pass-through contract can show it as a line, and the question to ask then is what allocation method the contract specifies.
A bill that states no calorific value at allWhat you can and cannot check when the conversion figures are missing.＋
Some suppliers print the reads and the kWh and nothing in between. That does not make the bill wrong, but it makes the conversion unverifiable from the invoice alone, and the conversion is where the error rate is. The figures can be recovered: the transporter must make its daily calorific values available for inspection, and send the calculations for specific days to anyone it conveys gas to who asks.
Questions
Why is my gas bill in kWh when the meter reads cubic metres?＋
Because a gas meter measures volume and gas is sold as energy, and the energy in a cubic metre of gas depends on what the gas is made of. The Gas (Calculation of Thermal Energy) Regulations 1996 set the conversion: the number of kilowatt hours is the converted volume in cubic metres multiplied by the average calorific value in megajoules per cubic metre, divided by 3.6. The converted volume is the meter reading multiplied by a correction factor, which is 1.02264 for a supply not expected to exceed 732,000 kWh a year.
What is the volume correction factor on a gas bill?＋
It is the multiplier that restates the volume your meter registered as the volume that gas would occupy at a standard temperature and pressure. Regulation 2(1) of SI 1996/439 fixes it at 1.02264 where gas is conveyed to the meter at a rate not reasonably expected to exceed 25,000 therms or 732,000 kWh a year. Above that rate it becomes a site-specific figure combining a standard temperature conversion factor of 1.0098, a pressure conversion factor that depends on height above sea level, and a compressibility factor.
What calorific value should my gas bill use?＋
The mean of the daily calorific values published for your Local Distribution Zone across the gas days billed, truncated to one decimal place. Regulation 3(2) says any amount of less than 0.1 megajoules per cubic metre is ignored, and Ofgem wrote to suppliers on 5 August 2014 to confirm that this means truncation. Rounding the average, carrying more than one decimal place, or applying a fixed value are all inconsistent with the regulations.
What are gas transportation charges?＋
They are the cost of moving gas through the pipes, in two layers. National Gas Transmission charges for entry to and exit from the National Transmission System, on a charging year running 1 October to 30 September. The gas distribution network for your area charges for the local pipes, on a charging year running 1 April to 31 March, published at least 60 days ahead. On a business invoice both usually appear as distribution lines, because the distribution network recovers the transmission exit capacity it bought on your behalf. The exception is the General Non-Transmission Services charge, which National Gas bills to your shipper rather than to the network, so it never appears as a line at all.
What do ZCA, ZCO, CCA, ECN and CFI mean on a gas bill?＋
They are the standard gas transportation charge codes. ZCA is LDZ system capacity and CCA is LDZ customer capacity, both charged per peak day kWh of reserved capacity per day. ECN is NTS exit capacity, which varies by exit zone. ZCO is LDZ system commodity, charged per kWh transported. CFI is the LDZ customer fixed charge, a flat pence-per-day amount that is higher for a monthly read supply point than a non-monthly read one.
What is the General Non-Transmission Services charge, and why is it not on my bill?＋
It is the National Gas charge that recovers the costs of everything the transmission business does other than transport gas, set under Section Y of the Uniform Network Code as a uniform rate independent of the entry or exit point used. It is payable on gas allocated to shippers at entry and again at exit, at 0.0206 pence per kWh at each end for the gas year to 30 September 2026 and 0.0213 pence from 1 October 2026. It is billed to your shipper rather than to your distribution network, so it is not one of the transportation lines on the invoice. It reaches you inside the unit rate on a fixed contract, or as a pass-through element on a flexible one.
Is the Climate Change Levy charged on gas?＋
Yes, at its own published rate. For 2026/27 the main rate on gas is 0.801 pence per kWh, rising to 0.827 pence on 1 April 2027. That is the same number as electricity, and has been since the two rates converged in April 2024, but HMRC publishes them separately and they can diverge again. A Climate Change Agreement discounts the gas rate by 89%, against 92% on electricity.
Does the October 2026 VAT cut apply to business gas?＋
No. The temporary removal of the 5% reduced rate from 1 October 2026 was announced for qualifying electricity supplies, and the announcement does not mention gas. No end date has been published for it either; the announcement says only that it is funded for the 2026 to 2027 financial year, which is where the 31 March 2027 date quoted elsewhere comes from. Ofgem sets out the price cap for the same window with VAT at 5% on gas. A business on the reduced rate at both meters therefore pays nothing on its electricity and 5% on its gas over that period.
What is the VAT de minimis for business gas?＋
Supplies of not more than an average rate of 5 therms or 145 kilowatt hours a day, or 150 therms or 4,397 kilowatt hours a month, to one customer. Below that the reduced rate of 5% applies automatically. The electricity thresholds are different, at 33 kilowatt hours a day and 1,000 kilowatt hours a month, so the same premises can be under the threshold on one fuel and over it on the other.
Do CfD, Renewables Obligation, Capacity Market or BSUoS appear on a gas bill?＋
No. Those levies and charges are defined on electricity supplied or on electricity demand, and none of them has a gas equivalent. A gas bill carries transportation charges, the Green Gas Levy, the Climate Change Levy and VAT, and nothing else in the way of pass-through. A gas invoice showing a line named after an electricity levy has a charge mapped to the wrong meter or an electricity template applied to a gas account.
What is the Green Gas Levy?＋
It funds the Green Gas Support Scheme, which pays producers for biomethane injected into the gas grid. Licensed gas suppliers pay it and recover it from customers, and it is charged per gas meter per day. The rate for the 2026 to 2027 financial year is 1.046 pence per meter per day, equivalent to £3.82 per meter over the year, and the rate for each year is published by 31 December in the year before.
Does an EII exemption certificate reduce a gas bill?＋
No. The Energy Intensive Industries exemption removes a certified proportion of four electricity policy levies and opens the network charging compensation scheme for electricity network charges. None of those costs appears on a gas bill, so there is nothing on it for the certificate to remove. The relief that does reduce a gas bill is a Climate Change Agreement, which discounts the Climate Change Levy on gas by 89%.
My gas meter reads in hundreds of cubic feet. How is that converted?＋
Regulation 2(2) of SI 1996/439 says a reading in cubic feet is construed as that reading multiplied by 0.0283, so one hundred cubic feet is exactly 2.83 cubic metres for billing. The physical conversion is 0.0283168, about 0.06% higher. A bill that only reconciles using the physical constant has been converted off regulation, and the difference is worth raising across a portfolio of imperial meters.
Every gas line, rebuilt from the published figure.
Simplest Energy recomputes the statutory conversion chain and each transportation, levy and tax line from the source that sets it, then compares the result against what you were billed.
- The statutory volume-to-energy chain recomputed from the reads, correction factor and calorific value the bill states
- The billed calorific value checked against the published daily series for the zone, averaged and truncated to one decimal place
- Gas commodity, capacity and customer charge, priced against quantities taken from the meter rather than the bill
- The Climate Change Levy at the gas rate, with the gas agreement relief and VAT de minimis
- Reference-pricing the distribution network charging statements, which today are priced from the contract-agreed rate
- Published calorific values before August 2021, which the National Gas portal no longer carries
Built from the primary document.
The Gas (Calculation of Thermal Energy) Regulations 1996 (SI 1996/439)
Guidance for gas suppliers on how to calculate the calorific value used for billing
Daily calorific values by Local Distribution Zone
Final gas distribution transportation charges from 1 April 2026
National Gas transportation charges for October 2026
Notice of General Non-Transmission Services charges, October 2026
Climate Change Levy rates
Fuel and power (VAT Notice 701/19)
Green Gas Levy rates for the 2026 to 2027 financial year
- Last reviewed
- 3 September 2026
- Technical basis
- The Gas (Calculation of Thermal Energy) Regulations 1996 (SI 1996/439) as amended, the Ofgem supplier guidance on calorific value calculation of 5 August 2014, the National Gas daily LDZ calorific value series for August 2026, the Cadent final gas distribution charge notice of 31 January 2026, the National Gas transportation charging update of 1 July 2026 covering prices published 29 May 2026, the National Gas notices of General Non-Transmission Services charges of 31 July 2025 and 31 July 2026 with table 22 of the October 2025 transportation statement, HMRC Climate Change Levy rates, VAT Notice 701/19 and the GOV.UK Green Gas Levy rates for 2026-2027, all checked 3 September 2026
- Review trigger
- The gas distribution charging year beginning 1 April 2027, the NTS charging year beginning 1 October 2027, the final General Non-Transmission Services notice published by the end of July 2027, the Climate Change Levy rate change on 1 April 2027, a new Green Gas Levy rate published by 31 December, or an amendment to the Gas (Calculation of Thermal Energy) Regulations 1996.
This guide explains how gas charges are set and calculated. It is not tax, legal or procurement advice. The transportation rates quoted are the published figures of a single network for the year from 1 April 2026, and they differ by network, exit zone and band. Check the source before relying on a figure.