Guide to Getting a Business Licence in the UK

Please note that this article is intended for educational purposes only and should not be deemed to be or used as legal, employment, or health & safety advice. For guidance or advice specific to your business, consult with a qualified professional.

It’s an exciting time, starting a new business. But beyond organising self-employment, tax, and registering with HMRC, there are other legal items that need to be ticked off your to-do list.

Read on as we look at how to apply for UK business licences, what variations are available, and how securing one is the final piece in the puzzle when getting your brand up and running.

What is a business licence?

A business licence is often issued by local authorities to permit particular business activities, though you may require approval from certain government bodies for others.

These licenses safeguard business owners, demonstrate best practice, and keep companies accountable to protect customers and clients. The legal obligation to own a business licence depends on what industry you work in and where.

Do you need a licence for a small business?

Whether you need a business licence for your small business varies based on the services you provide. Examples of services that require a licence include:

  • Alcohol sales
  • Events
  • Health and beauty
  • Childcare
  • Playing recorded music in public - such as streaming, radio or CD
  • Handling personal customer data

If you’re unsure whether you need one or where to apply, search this helpful licence finder tool on the Government website to find out more.

You can also explore our guide for new business owners and find out how to register your business, so you can get your brand ready to launch and leave a lasting impression.

Types of business licences for different industries

Retail business

Whether your small retail business requires a business licence all depends on the services you provide and the products you sell. While you don’t always need a trading licence to sell general goods, if you operate online then you will need to follow a set of government regulations. Make sure to do your research to ensure whether or not your business should be covered by a certain license.

On the high street, your retail business may play recorded music on the shop floor, hold personal customer data, or use CCTV surveillance to protect valuable goods. All these activities legally require a licence or official fee, including:

In other cases, a retail business may need a one-off licence for activities such as public events or street parties. If your company already owns a music licence, live music events will be covered. Otherwise, you may need a Temporary Event Notice (TEN) to cover further entertainment for events like celebratory product launches, classes, or fundraisers.

Food and beverage business

From independent bars to the next trendy brunch spot, you’re likely to handle food items, sell alcoholic drinks, employ young people, and perhaps offer alfresco-style dining. In this industry, the best way to honour your tireless efforts toward creating your small business is to avoid unhelpful fines by making sure you’re covered to do all these things.

On top of music and CCTV licenses, you may need the following to legally operate to your full potential:

  • Food business registration – this one’s important, as you could face fines and more serious repercussions without one. Thankfully, it’s free to register, so make sure you do so at least 28 days before opening.

  • Food premises approval – all food and beverage establishments require inspection and approval from a local authority to ensure safe preparation of food. Regulations vary across England, Wales, Scotland, and Northern Ireland.

  • Premises licence – the licence conditions to legally serve alcohol vary across England, Wales, and Scotland, so seek advice from your local authority.

  • Child work permit – to legally employ teenagers aged 13 – 16 you need permission from your local council in England, Wales, and Scotland, as well as parental approval.

  • Pavement or street display licence – the conditions of this license also vary across England, Wales, and Scotland.

  • TV licence

Home-based businesses

Starting a home-based business is an exciting and personal experience so, when it comes to legal obligations, no stone should be left unturned. Of course, you want to make sure everything is organised and secure – after all, it’s as close to home as it gets.

Depending on the type of business you’re running, you may require permission from your local council. The government website provides a helpful and thorough checklist to consider when running a business from home, including how to contact your local authority to be certain of what you’ll need.

Accountants

Preparing and managing important financial information holds a lot of responsibility. After attaining your qualifications, there are certain permissions to consider before becoming a self-employed accountant or starting your own practice.

Typical services that require cover include:

  • Organising tax returns
  • Bookkeeping and financial reports
  • Budget management
  • Financial forecasting and advice
  • Audit compliance
  • Obtaining personal customer and client data

All regulated financial activities must be authorised by the Financial Conduct Authority. You also need to apply for a data protection fee by the ICO to manage the employment information and personal data of customers and clients.

Other mandatory licences include:

Without acquiring the mandatory business licences, you won’t be able to practice as a self-employed accountant in the UK. So, before you begin bookkeeping, it’s best to count off these obligations first. If you’re accounting for your own small business, we also have a few helpful tips.

Beauty and wellbeing

There’s nothing like leaving a salon, barbers, or spa feeling completely revitalised – and seeing that beaming smile on a customer’s face makes your hard work worthwhile.

While we might not want to dwell on the boring stuff, business licences and health and safety documents ensure compliance, protecting business owners as well as customers.

To safely pamper your prized clientele, you must invest in a premises licence from your local authority. This allows you to practice beauty treatments and deliver the following services:

  • Massages
  • Manicures
  • Chiropody
  • Light treatments, such as sunbeds
  • Electric treatments
  • Other related heat, light or vapour treatments, such as saunas

Other cosmetic treatments, such as piercings, require a separate licence, which vary across the England, Wales, and Scotland. Plus, you might also need to process personal data – if so, make sure to apply to the ICO.
What’s more, you may need to seek individual licences for creature comforts such as background music, TV, and beverages – completing the luxury experience for your customers.

Tradespeople

In the practical trade industry, you’ll want to follow things by the book to get results. The ultimate goal is to provide a safe and quality service for your customers. Make sure to apply for relevant mandatory licences to protect your business and certify your skills.

Whether you’re an electrician, plasterer, joiner, or decorator, here are a few business licences to consider before you crack on:

Working with customers and clients, your small trade business may also need to apply for a data protection fee with the ICO.

How to get a business licence

Which business licence you may need depends on your business’ industry, location, and provided services. It’s best to do your homework so you can rest assured your business licenses are fit for purpose.

Your local authority is an excellent resource to help you decide which licences are right for you. You can use this handy licence finder tool to find out more.

How much does a business licence cost?

The cost of a business licence depends on what kind of licence you’re applying for. Price can vary based on the authority it falls under as well as the applying organisation.

Common licences such as data protection fees can range anywhere between £40 and £2,900.

Starting your own small business often involves some necessary admin but, in the end, you’ll see results. It’s pretty important to make sure your legal checklist is in place, including any trading licences, to make your business dream a reality.

At the beginning of 2021, there were a reported 5.5 million small businesses operating in the UK, responsible for approximately 50% of net turnover within the private sector. Small business owners are becoming the backbone of the industry, but the backbone of every small business are the licenses and paperwork that keep things moving.

Once you’re up and running, Square can help you organise orders and payments all in one place, so you can focus on running your business.