As an entrepreneur, laying the groundwork for your business is one of the most exciting things you will ever do. It always starts out with an idea that you are passionate about, laying concrete plans on how to bring the idea to life, and then raising the capital necessary to bring those plans into fruition. By the time you are done with the process of forming your company, the buildup of excitement is almost always too much to bear.
But, before you open the doors to your business, you may need to obtain business licenses. Or there may also be certain qualifications that your business may be need before it can even start to trading.
Whichever the case, you will have to comply with all the requirements that the government and local authorities impose on small businesses.
Failure to do so may not only lead to you incurring penalties but also put your business at risk of getting shut down.
The types of UK business licenses, permits and qualifications that you will need will depend on:
- the location of your business
- the nature of your business
- any other activities that are incidental to operating your business
Here’s what you need to know.
The Nature of Your Business
The nature of your business will play a significant role in determining what types of licenses, permits and qualifications you need. This is because the government imposes stricter regulations on some sectors than others.
One of the most common examples of a business that needs to get a license is any business that involves the sale of alcohol. For such a business, operating without a license may lead to penalties, and in some cases the closure of the business.
It is important to note that in some cases, you may need different types of licenses for the same business. For example, if you sell both alcohol and tobacco, you’ll need licenses for each of those activities.
Since businesses that handle or deal with materials that are potentially harmful to the environment are usually highly regulated, choosing to venture into a business that falls in this category will mean that you will have to apply for more licenses. You may need to notify the Health and Safety Executive, apply and obtain environmental permits from your local authority, and even file pollution inventory reporting returns.
Therefore, whichever license, permits, or registration certificates you will need for your business will depend mainly on the nature of your business and how you will go about providing services or selling products to potential customers.
Activities Incidental to Running Your Business
There are things that you will need to do in order to safely and successfully run a business. For example, if your business is at a fixed location, you will need to rent out space. As a result, you may be required to obtain a premises license that is usually issued by the local authority. In most cases, a business is granted this license after a thorough inspection of the premises and the license is usually an indication that the premises comply with all the safety and health codes stipulated by the local authority.
If you need to carry out surveillance on your property, you may also be required to obtain a license for this. Therefore, even if your business doesn’t have anything to do with offering surveillance equipment, you may be required by law to obtain a license from the SIA (Security Industry Authority) for you to be able to conduct surveillance on largely public spaces.
Also, even though you don’t intend to run an entertainment joint, you may also have to obtain a license to play background music in a cafe, salon, church, or office. You will get this license by applying for it through the PPL PRS and after paying the required fee.
The Location of Your Business
The number and type of licenses that you need in order to get your business operational will also depend on where your business is located. This is because local authorities usually pass regulations and requirements that govern the way business is conducted within its jurisdiction. Since there are different local authorities in the country, and since some regulate businesses more than others, it stands to reason that licenses and qualifications will vary depending on location.
The location of your business will also determine where you will actually register for some licenses. For licenses such as food premises approval, food business registration, environmental permits, and temporary events notices, are usually applied for and obtained at the local authority level.
Business Licenses and Permits Vary in Duration
The licenses that you obtain usually lapse after a set period. Some are valid for years, while others expire after a period of a few months. Also, some licenses and permits are flexible as far as their validity period is concerned — depending on how much money you are willing to pay — while others have a fixed period and can only be renewed after thorough inspections are carried out.
Once your license or permit expires, you will need to renew it. Normally, this is usually subject to paying specified fees to the relevant authority. However, in some cases, the renewal of a license or a permit is dependent on complying with or meeting a given set of requirements. A good example of these are environmental permits and licenses.
In order to ensure the quality of services or goods, authorities normally require some form of qualification. This may be in the form of accredited qualification, a professional certificate, or any other form qualification that has been set out by a recognized authority that governs a particular industry. For example, if you intend on running a real estate agency, the issuance of a permit or license may be subject to your registration.
Another common qualification that is usually considered is your criminal history. You may not be granted licenses in certain industries if you have any criminal convictions. For example, if you have previously been convicted of fraud, you may have a hard time getting a license in any area that involves managing other people’s money.
Government Business Licence Finder
If you need help working out what kind of business licence you need then try the government website licence finder.
Licences vary council to council so if in doubt speak to your local authority.
New Here? These are my most popular resources:
- The Ultimate Bookkeeping Spreadsheet – Organise your money, track the numbers that matter and stay on top of your cash;
- FREE Guide: 11 Common Small Business Setup and Tax Mistakes – Are you worried your business isn’t set up correctly? Use this guide to identify whether you’re making the 11 most common financial pitfalls I’ve seen when it comes to setting up a business and taxes, as well as finding out how you can put them right;
- Sole Trader or Limited Company? – Download my free calculator to check which business structure would help you to pay less tax;
- FREE Business Expenses Cheatsheet – Check what you can and can’t claim as an expense against your taxes.
- 6 Core Elements of Self-Employment Taxes – Confused by taxes? Worried you’re missing something when it comes to tax allowances and reliefs? These easy to follow 6 mini-guides will have you on top of the tax side of things in no time at all.