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Starting a business often comes with a long to-do list, and for some, obtaining a business licence is one of the items to check off. While not all businesses require one, certain industries do mandate a licence by law. Which sectors are affected? What are the costs involved? And can you invoice customers without one? Let’s explore.

Key takeaways 

• Not all businesses require a business licence 

• It's illegal to trade without one if your industry or activity requires it

• Many different types of business licences exist, so it’s important to know which you need

What is a business licence?

A business licence is a government-issued permit that allows businesses to carry out certain activities in specific industries. Its main purpose is to protect consumers who interact with a business. 

By applying for and receiving approval for a business licence, a company demonstrates to customers and government agencies that it takes health and safety seriously and actively works to protect its customers from potential harm. Therefore it is a legal requirement for some activities and businesses. 

Do you need a business licence in the UK?

Not all businesses need a licence to trade in the UK, but you should still check. Trading without a required business licence can lead to serious consequences, including:

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• Prosecution for trading illegally

• Seizure of goods

• Imprisonment

• Criminal conviction

• Closure of your business

You can avoid these consequences by staying organised and knowing what’s required before you start trading. Check the to see if your business activities need a licence. 

If you trade nationally across multiple authorities, take the time to understand the licensing requirements for each one before you start trading.

Types of business licences 

The UK has many types of business licences – there are 449 results shown in the government licence finder. Here are some examples of the more common industries and licence/registrations you may need.

Retail

Retail is a big industry in the UK, and it involves a wide range of activities. Some of these activities require a licence, while others don’t. Here’s when you need one.

• Sale of restricted goods: If you sell alcohol or other restricted goods, such as nail varnish, you need both a and a . To get a personal licence, you must complete a BIIAB Level 2 Award for Personal Licence Holders from an accredited provider. Your local authority issues the premises licence

• Street advertising: If you plan to advertise your business with a sign on the pavement or road, you need a

• Licence to entertain: Many retail businesses play music or have the television on to create a comfortable environment for customers. To play music, you need TheMusicLicence through . If you’re showing anything on live television, you need a

• Selling door to door: Not all retail businesses operate from a fixed premises. If you sell goods and services on the doorstep, you need a . You do not need this certificate if you visit customers, only if you sell to them

Food

Selling food carries several potential risks, so it’s important that your business follows health and safety guidelines to avoid harming your customers. If you prepare, store or sell food, you need to demonstrate the following:

• Food premises approval: Wherever you plan to prepare and sell food, the local council must . You need to obtain this approval before you start your operation, so make sure you allow enough time. Once your premises receives approval, display your status as instructed by the local council

• Food business registration: You must at least 28 days before opening your premises. This includes trading from home, a temporary premises such as a stall or van, or selling food or drink online. If you have multiple locations, each one must register with the correct local authority

Obtaining a food hygiene certificate isn't a legal requirement, but it's good practice for you and your employees to take the course. Displaying the certificate reassures customers that you handle food safely.

If you serve alcohol, you need both a personal licence and premises licence, just as you do in retail. If you play music, you need TheMusicLicence through PPL PRS. 

Professional financial services

If you work in the finance industry, you need to do a couple of things:

• Financial Conduct Authority (FCA) registration: The FCA is the UK financial regulator. If you plan to give advice about any regulated financial services, you need

• Anti-money laundering registration: You must with the supervisor that regulates your industry sector to follow anti-money laundering regulations correctly

Street trading

If you plan to trade in public places, such as on the street or on a beach, you may need a . This requirement doesn’t apply to every local authority, so check individually first to find out what's required. You can apply for either a permanent or temporary street trading licence. 

Service-based

Many service-based businesses operate in the UK, ranging from taxi drivers to childminders and dog walkers to private tutors. Here are a few licences that might apply if your business is service-based.

• Driving licence: If your business involves driving, whether it’s driving others or goods, you need a

• Environmental permits: You may need to apply for an from your local authority if you need to dispose of waste that could damage the environment 

• Childminder registration: If your business involves looking after children, you must with Ofsted or a childminder agency

You can apply for other qualifications and certifications to help secure clients or prove you’re credible and responsible. These include , certain types of business insurance and educational qualifications. 

You do not need a business licence to get business insurance. However, if you start trading without the right licence, your business insurance policy may be invalid, which can lead to declined claims. 

How to get a business licence

Obtaining a business licence is relatively straightforward. Once you’ve noted any necessary licences, contact the relevant local authority or regulatory body. You can usually do this online or over the phone. 

Next, complete the relevant application form and attach any required information. Most licence applications also include a fee, which is due during the application process.

Many licences involve site inspections and assessments, which can take time. Be sure to stay organised and apply well in advance. Once all requirements are met, your application will be either approved or rejected by the relevant local authority or governing body.

Once approved, you must maintain your licence by following any conditions set. You may also need to renew the licence periodically or display it where others can see it.

How much does a business licence cost?

Several factors can impact the cost of a business licence, including:

• The size of your business and whether you trade across multiple local authorities

• The type of licence you need, such as permanent or temporary

• The number of licences you need

• The work required to satisfy inspections and assessments

• The local authority you’re dealing with

While you can't shop around for business licences, you can ensure you only pay what you need by determining exactly what you require to trade legally.