What is a business licence?
When you are setting up a business, an important requirement to satisfy is whether your business needs a licence. In the UK, certain types of businesses require certain licences in order to operate legally. The most common businesses needing licensing are those that involve gambling, the sale and or supply of alcohol and tobacco, or the provision of entertainment.
Alcohol licensing
The businesses and organisations that need alcohol licences may include:
Pubs and bars;
Cinemas;
Theatres;
Nightclubs;
Late-opening cafes;
Takeaways;
Village and community halls; and
Supermarkets.
1. Any business or organisation that sells or supplies alcohol on a permanent basis needs to apply for a premises licence.
2. Any individual who plans to sell or supply alcohol or authorise the sale or supply of alcohol is required to apply for a personal licence.
3. Qualifying members’ clubs (e.g. the Royal British Legion, working men’s clubs and sports clubs) must apply for a club premises certificate if they plan to sell or supply alcohol.
Completed application forms for these licenses must be sent to your local council, along with the fee. You may also need to send copies of your form (depending on the type of application you are making) to other ‘responsible authorities’.
Responsible authorities
Police;
Local fire and rescue;
Primary Care Trust (PCT) or local health board (LHB);
The relevant licensing authority;
Local enforcement agency for the Health and Safety at Work etc Act 1974;
Environmental health authority;
Planning authority;
Body responsible for the protection of children from harm;
Local trading standards;
Any other licensing authority in whose area part of the premises is situated; and
Home Office Immigration Enforcement (on behalf of the Secretary of State).
Licence fees under the Licensing Act 2003
Licence fees are set out in the Licensing Act 2003 (Fees) Regulations 2005. The fees paid in respect of applications for new premises licences and club premises certificates; applications for full variations to premises licences and club premises certificates; and annual fees in respect of premises licences and club premises certificates vary depending on the national non-domestic rateable value (NNDR) “band” of the premises. Your rateable value can be found on the Valuation Office Agency website. Premises that are exempt from non-domestic rating are allocated to Band A. Premises that do not have a NNDR because they are under construction are allocated to Band C. An additional fee may be payable for large scale events, comprising of 5,000 or more people due to attend an event at a venue that is not purpose-built.
1. Premises Licence
All businesses and organisations undertaking licensable activities on a permanent basis must have a premises licence from their local authority. This licence authorises the use of the premises.
Premises are defined in the Licensing Act 2003 as a vehicle, vessel or moveable structure or any place or a part of any premises. Licensable activities include:
Sale or supply of alcohol
The retail sale of alcohol or the supply of alcohol by or on behalf of a club.
Regulated entertainment
Regulated entertainment in the presence of an audience (whether members of the public or a club), or otherwise for profit, and the premises have the purpose of providing the entertainment concerned. It may include:
a performance of a play, a dance or live music;
the playing of recorded music;
an exhibition of a film; and
an indoor sporting event.
Late night refreshment
Late night refreshment is the sale of hot food or drink to the public between 11pm and 5am to consume off or on the premises. For further information, see Schedule 2 to the Licensing Act 2003.
2. Personal Licence
A personal licence allows the individual to sell alcohol on behalf of any business that has a premises licence or a club premises certificate. To be eligible to apply, you must be 18 years or over, and you must obtain an accredited licensing qualification first - for example, the BIIAB Level 2 Award for Personal Licence Holders or a similar accredited qualification. This is to ensure you are aware of licensing law and the wider social responsibilities that comes with the sale of alcohol.
Anyone who does not hold a personal licence must be authorised to sell alcohol by a personal licence holder.
Premises licensed to sell alcohol must have a Designated Premises Supervisor (DPS), who holds a personal licence. Only community premises that have successfully applied to waive the DPS requirement under section 41D(3) Licensing Act 2003 are exempt. You are also not required to have a personal licence to be employed in a pub or other business that sells alcohol.
Designated Premises Supervisor
This person will act as primary contact for local government and the police. They do not need to be on site all the time but must be always contactable. They must understand the social issues that accompany the sale of alcohol, and also have a good enough understanding of the business itself to be elected as representative. Due to the grave impact alcohol has on the wider community, crime and disorder and anti-social behaviour, the sale of alcohol carries greater responsibility than other licensable activities.
3. Club Premises Certificate
Members’ clubs can operate under club premises certificates instead of premises licences.
This relieves them of the obligation to have a DPS, and the sale of alcohol does not need to be authorised by a personal licence holder.
To be classified as a club for the purpose of this certificate, a group must satisfy:
legitimacy - each applicant must be a real club with at least 25 members;
a membership process conducted for at least two days between application and acceptance;
no alcohol is supplied on the premises other than by the club; and
alcohol is purchased legally by a committee made up of members all of whom are at least 18 years old.
Applications are made by post or alternatively, online if your council accepts electronic applications.
Temporary events
If you are organising a temporary event where you will serve or sell alcohol, provide late night refreshment, or put on regulated entertainment, you will need to complete a temporary event notice (TEN). A TEN is defined as, a relatively small-scale event for fewer than 500 people and lasting no more than 168 hours.
TEN applications can be made online.
Mandatory licensing conditions include:
The sale of alcohol below the cost of duty plus VAT is banned under The Licensing Act 2003 (Mandatory Conditions) order 2014.
Further mandatory conditions are set out in the Licensing Act 2003 (Mandatory Licensing Conditions) (Amendment) Order 2014:
A ban on irresponsible promotions such as drinking games, rewards for consumption, or free and discounted provision of alcohol that poses significant risk to social factors (the prevention of crime and disorder, public safety, public nuisance, and the protection of children from harm);
Provision of free potable (drinking) water is mandatory;
An age verification policy must apply to the premises; and
The mandatory provision of smaller measures - making the customer aware the drinks are available in smaller quantity.
Entertainment Licensing
Businesses, organisations and individuals who wish to provide various types of entertainment may require a licence or authorisation from a licensing authority – e.g. a local council authority. Occasions where you may need a licence include:
1. Music entertainment
A licence is not required to stage a live music performance, nor the playing of recorded music if the event occurs:
between 8AM and 11PM;
at an alcohol on-licensed premises; and
the audience is no more than 500 people.
You also don’t need a licence:
to put on unamplified live music at any place between the same hours; or
to put on amplified live music at a workplace between the same hours to an audience of no more than 500 people.
In other circumstances, a licence may be required. One licence application can cover all types of regulated entertainment and the sale or supply of alcohol.
There are exemptions from the need for a licence for music entertainment, including for:
places of public worship, village halls, church halls and other similar buildings;
schools;
hospitals;
local authority premises; and
incidental music - music that is incidental to other activities that aren’t classed as regulated entertainment.
2. Film screening
A licence is needed to screen a film or exhibit moving pictures. A licence may be required to show a film:
in public; and
or in private, if those attending are charged for entry and the intention is to make a profit, including raising money for charity.
Please note that the licensing of entertainment under the Licensing Act 2003 is a separate matter from copyright authorisation to show films in public.
One licence application can cover all types of regulated entertainment and the sale or supply of alcohol.
There are exemptions from the need for a licence for film entertainment, including for:
places of public worship, village halls, church halls and other similar buildings;
education;
incidental film – moving pictures that are incidental to other activities that aren’t classed as regulated entertainment; and
television broadcasts.
3. Sporting event
A licence is not required to stage an indoor sporting event if it occurs:
· between 8AM and 11PM; and
· the number of spectators does not exceed 1000 people.
In other circumstances, a licence may be required. One licence application can cover all types of regulated entertainment and the sale or supply of alcohol.
4. Boxing/Wrestling
A licence is required to stage boxing, wrestling and mixed martial arts. One licence application can cover all types of regulated entertainment and the sale or supply of alcohol.
Intellectual Property - Licensing bodies and collective management organisations
If you would like to use copyright material, you need to get permission from the rights holder to do so. Examples of copyright works include literary works, newspapers, broadcasts, pictures or music.
Permission can be obtained directly from the rights holder or granted in the form of a licence from a licensing body. A licensing body is broadly described as any organisation which offers licences for the use of copyright work.
A Collective Management Organisation (CMO) is one example of a licensing body which grants rights on behalf of multiple rights holders under one overall licence for a single payment. Rights holders will join a CMO as members and instruct it to licence their copyrights on their behalf. The CMO charges a fee for the licence, from which it deducts an administrative charge before distributing the remainder as royalties. They are typically not for profit organisations, owned and controlled by their members.
Each sector usually has one CMO which may be able to offer a collective licence.
The conduct of UK CMOs is regulated by the Collective Management of Copyright (EU Directive) Regulations 2016 (“the CRM Regulations”).
Food premises approval (England)
Businesses that handle meat, fish, egg or dairy products, must be inspected and may require approval by the local council.
The council will decide if you get approval or need to register.
You do not require approval if you sell direct to the public or retailers like pubs, restaurants, and caterers if:
food is less than 25% of your trade;
you do not handle any wild game meat products; and
you only sell food within the county in which your business is registered.
If approved, your local council will set out how you should display your approved status.
Hairdresser registration (England)
If you own a business as a barber or hairdresser, check with your local council to find out if you need to register your business.
This enables your local council to check that you are following health and safety rules. They may charge you a fee and inspect your premises before they give you a certificate of registration.
Once registered, you will need to display a copy of your certificate where it can be easily seen by your customers. Your council will also tell if you need to display a copy of any local byelaws.
Health and safety
Irrespective of whether or not you are required to register, you must still comply with local byelaws relating to:
ensuring your premises are clean, well-lit and properly ventilated;
taking precautions against infection or contamination;
ensuring your staff work hygienically and use equipment efficiently; and
getting public liability insurance cover.
Retail Businesses
Retail businesses may carry out several activities that require various licences including:
The use of CCTV systems – and obtaining a licence from the Security Industry Authority (SIA);
Processing personal information about any individuals including customers, employees etc – you must pay a data protection fee to the Information Commissioner's Office (ICO);
Placing advertising board on the pavement or verge – you should contact your council to find out if you need a licence;
Playing background music in your premises – you must apply for ‘The Music Licence’ from the Phonographic Performance Limited and the Performing Rights Society (i.e PPL and PRS); and
Playing television programmes in the background – you must apply for a TV Licence.
How can Pure Business Law help?
To discuss any of the matters raised in this article, please contact Pure Business Law. We are fixed fee specialist business and commercial solicitors based in Bedford and London. We operate nationally. If you would like to discuss starting a second business, require advice on the appropriate legal structure for your business or anything else raised in this article or on our website, please contact us and speak with one of our specialist expert business and commercial solicitors.
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