A business licence is an official permit that stipulates how certain business operations must be conducted. Business licences are issued by the government or a professional association. The more than 150 licensing regimes in the UK are designed to strike a balance between market access and public protection. Risks pertaining to consumer rights, safety, health and fair competition are managed by these licences.

Businesses must determine the permits required by their industry and location in order to operate lawfully. While some licences are universal, such as the Data Protection Registration (ICO) for handling personal information, others are trade-specific. For instance, hospitality businesses need to obtain Premises and Personal Licences to serve alcohol, while professional services may require approval from Financial Conduct Authority (FCA). 

Many small businesses and online retailers can trade without a specific business licence, provided they are registered with HMRC.

Responsibility for licensing sits across different levels of government. While central regulators oversee sector specific systems such as broadcasting or environmental permits, local authorities are in charge of regimes such as alcohol and entertainment licensing under the Licensing Act 2003. With Scotland, Wales, and Northern Ireland having their own frameworks for areas such as child care and property rental, devolution has led to distinct and sometimes disparate systems.

The Department for Business and Trade’s Smarter Regulation agenda has recently become the centre of policy focus. By simplifying and digitalising processes to reduce the administrative burden on entrepreneurs, this initiative aims to boost economic growth. Earned recognition is a key component of this reform, encouraging innovation without compromising public standards by rewarding compliant businesses with fewer inspections.

Further reading

This entry was written by Mann Virdee. Mann is a Senior Researcher at The Entrepreneurs Network, and Sir Isaac Newton Adjunct Fellow in Science, Innovation and Technology at the Council on Geostrategy.