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What is a business licence and who needs one?

There’s a lot to consider for new business owners and entrepreneurs when starting a new business.

Maintaining legal compliance for your new venture from day one is a key consideration, so obtaining a business licence should your business require one is one to tick off your list.

Not all businesses are required to obtain a business licence, but it’s important to determine whether it’s necessary for your business.

Read our guide on reasons to start your own business opens in new window.


What is a business licence?

Obtained from a government agency, a business licence is permission for certain business activities to go ahead in the chosen jurisdiction of the government body or affiliated body granting the licence.

A business licence is required for certain business activities to protect consumers.

Obtaining the licence proves that the business or entrepreneur undertaking the activity has considered the protection of public health and safety.

A business licence ensures you comply with regulations and maintain industry standards.


Does your business need a licence?

There are many different business licences depending on the type of business you are embarking on.

For example, it’s a very different licence for those working in the catering industry from a licence you would need for running a childminding business opens in new window that would need to be acquired from the affiliated body, Ofsted.

Many businesses in the UK will not require a business licence, but it’s a good idea to check with your local authority early on to be sure whether your business requires a licence.

If you are a national business operating across authorities throughout the UK and your business sector requires licencing, you will need to be clear on your licencing requirements before you begin.

You can visit the government website and use their licence finder opens in new window to determine whether your business requires a licence.


Common types of business licences in the UK


The below are just some examples of business licenses:


1. Serving alcohol

If you are running a business such as a pub or restaurant that serves alcohol to the public, there are two forms of business licence you will need.

Your premises in which you plan to carry out the ‘licensable activity’ as stated in the Licensing Act 2003 opens in new window will need a licence, and you or a member of your staff must hold a personal licence to sell the alcohol.

For your premises to become ‘licenced’, they will undergo fire, health, and safety checks.

To serve alcohol, you will need to undergo training to become a ‘licensee’.

The penalty for serving alcohol without correct licences could be up to £20,000 fine and/or six-month imprisonment opens in new window.

Find out more about alcohol licencing opens in new window on the government website.

Read our guide on how to start an off-licence opens in new window.


2. Food business registration

Any business that covers ‘food operations’ will need to have food business registration, which isn’t a licence as such, but is essential for any business that does any or all of the following:

  • sells or cooks food
  • handles or stores food
  • distributes or prepares food.

Apply for food business registration opens in new window through the government website.

Operating with food without registering opens in new window could result in a fine or up to two years imprisonment.

Read our guide on starting a food and drink business opens in new window.


3. Street trading

To trade on the street opens in new window, it’s possible you could need a street trading licence, but this is dependent on your local authority.

A street trading licence will allow you to sell certain goods in public areas that are free to access, such as streets and beaches.

You can apply for either a temporary or a permanent licence.

It’s worth contacting the local authority of the area you are looking to trade in to find out what is required.

Trading in public areas without the appropriate licence could result in a fine of up to £1,000.

Find out more about street trading licences opens in new window on the government website.


4. Taxi and private hire vehicle

You will need the correct licence to drive a taxi or private hire vehicle.

Licences to drive a taxi differ from those needed to operate a private hire vehicle.

Driving a taxi or private hire vehicle without a licence could result in a fine.

Find out more about taxi and private hire vehicle licences opens in new window through the government website.


5. Cat and dog boarding

If your business is boarding cats and dogs in your home, or kennels or cattery, you’ll need a licence, even for a small number of animals.

Your property will be inspected by your local council to meet the requirements of the licence.

You could be fined or imprisoned for up to six months opens in new window for boarding cats and dogs without the appropriate licence.

Find out more about licences for boarding cats and dogs opens in new window at the government website.

Read more about starting a dog walking business opens in new window.


6. Childminding

To look after someone else’s children in either your home or someone else’s home, you will need to have a licence from the affiliated body, Ofsted opens in new window, or a childminder agency opens in new window from the government’s approved list.

Your premises for childminding will be inspected to ensure you meet the criteria for each child’s safeguarding and welfare as well as their learning and development.

You can contact your local authority to find out about applying for childcare licences, opens in new window and you could face criminal charges opens in new window if you provide unregistered childcare.

Find out more about becoming a childminder opens in new window in our helpful guide.


7. Waste carrier

If your business involves carrying, buying, selling, or disposing of waste opens in new window or arranging for someone else to buy, sell, or dispose of waste, you will need a licence.

You risk an unlimited fine opens in new window if you carry waste without a licence.

To register for a waste carrier licence opens in new window, visit the government website.


8. Performing rights

If you’re starting a business that involves playing recorded or live music or uses sound recordings in a public place, you will need to obtain ‘TheMusicLicence’ from the PPL PRS opens in new window.

If you are using music (even in the form of playing the radio) in a business or organisation that has employees, customers, or visitors then you usually need a music licence.

You could be fined opens in new window for playing music in a public area without the correct licence.

Contact PPL PRS opens in new window to find out what type of licence you’ll need for your intended event.


How much does a business licence cost?

The cost can vary depending on the type of licence you need for your business.

Factors affecting the cost of a licence can be the sector your business operates in, the length of time you wish to have the licence for, and the local authority you are seeking the licence from.


How to obtain a business licence

To obtain a business licence, follow these steps:

  • identify the relevant licence and regulatory body
  • complete the application form and submit any required documentation
  • pay the application fee
  • pass any necessary inspections or assessments
  • await approval or rejection of the application.


Maintaining and renewing business licences

When you apply for your business licence you will be applying for a licence for a set period, and it’s important to remember that if you need the licence continuously renew the licence when it expires.

It’s also advisable to be aware of any conditions you are required to comply with in the terms of the licence, such as displaying your licence on your premises or website.

If you want to learn more about licensing it’s a good idea to seek independent specialist advice.



Learn with Start Up Loans and help get your business off the ground

Thinking of starting a business? Check out our free online courses in partnership with the Open University on being an entrepreneur.

Our free Learn with Start Up Loans courses opens in new window include:

Plus free courses on finance and accounting, project management, and leadership.


Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

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