What Licences or Permits Might My Small Business Need

At Towerstone Accountants we provide specialist small business accountancy services for owners, directors, and growing businesses across the UK. We created this webpage for small business owners who want clear guidance on managing finances, meeting tax obligations, and making informed decisions without jargon. Our aim is to help you stay compliant, improve cash flow, and build a more resilient business.

One of the areas that causes the most uncertainty for new and growing small businesses is licences and permits. I see this regularly when people come to me after they have already started trading and suddenly realise that there may be permissions they should have applied for earlier. In most cases there is no bad intention behind it. People are focused on winning work serving customers and getting the business off the ground, not navigating layers of regulation that are rarely explained clearly in one place.

From my experience working with small businesses across the UK licences and permits are often misunderstood. Some people assume they need dozens of approvals when they actually need very few. Others assume they need none at all and only discover later that a specific licence was required for their activity. Both situations can lead to unnecessary stress disruption or cost.

In this article I want to explain clearly what licences or permits your small business might need in the UK. I will walk through the different types of permissions that exist how they vary by industry and location and how to work out what applies to you. This is written from a practical perspective grounded in UK rules and real world experience rather than legal theory. By the end you should feel confident about identifying what you need and taking action in the right order.

Understanding the difference between licences permits and registrations

Before looking at specific examples it is important to clarify terminology because these words are often used interchangeably.

A licence is formal permission granted by a regulator or authority that allows you to carry out a specific activity. It usually comes with conditions ongoing obligations and sometimes renewal requirements.

A permit is similar but is often more limited in scope or time. Permits are commonly linked to environmental health planning or local authority control.

A registration is slightly different. In many cases you are not asking for permission but are legally required to notify a regulator that you are carrying out a certain activity.

In practice small businesses may need a mix of all three depending on what they do.

Why licences and permits matter

Licences and permits exist to protect customers the public and the environment. They also protect businesses by setting clear standards and boundaries. Operating without the correct permissions can lead to fines forced closure reputational damage and in some cases criminal liability.

From a practical business perspective licences also matter because banks insurers landlords and customers may ask for proof that you are properly authorised. Being compliant makes your business easier to work with and more credible.

It is far better to address this early than to fix problems later under pressure.

The starting point, what your business actually does

The first step in working out what licences or permits you need is to be very clear about what your business actually does. This sounds obvious but many businesses fall into grey areas.

For example there is a big difference between selling food that you prepare yourself and selling pre packaged food. There is a difference between providing advice and providing regulated financial services. There is a difference between casual home working and operating a business from a residential property with visitors.

Licensing requirements are based on activity not business size or turnover. Even very small businesses can need specific permissions if they operate in regulated areas.

Licences linked to business structure and setup

Most businesses do not need a general licence just to exist. There is no universal small business licence in the UK. However there are registrations linked to how you operate.

If you are self employed you must register with HMRC for Self Assessment. This is not a licence but it is a legal requirement.

If you run a limited company you must register with Companies House. Again this is not a licence but it is mandatory.

If you employ staff you must register as an employer with HMRC.

These are foundational requirements and sit alongside any industry specific licences.

Licences and permits required by industry

This is where things become more specific. Certain industries are regulated more heavily than others and require formal permission to operate.

Below I will outline common sectors and the types of licences or permits that often apply. This is not exhaustive but it covers the areas where small businesses most commonly need approval.

Food businesses

If your business involves food at any stage you will almost certainly need to register with your local authority. This applies whether you cook food sell food store food or distribute food.

Examples include cafes takeaways mobile food vans caterers home based bakers and online food sellers.

Food businesses must:

• Register with the local council at least 28 days before trading
• Comply with food hygiene regulations
• Allow inspections by environmental health

In some cases additional permissions are required such as street trading consent for food vans or licences for selling hot food late at night.

Food hygiene ratings are not optional and inspections are routine.

Alcohol related businesses

Selling alcohol is tightly regulated. If your business sells alcohol you will need the appropriate licences under licensing law.

This usually involves:

• A premises licence
• A designated premises supervisor
• A personal licence holder

These licences are issued by the local authority and involve formal applications public notices and sometimes hearings.

Even online alcohol sales are covered by these rules. Many small businesses are surprised by how early alcohol licensing must be addressed.

Businesses operating from home

Running a business from home does not automatically require a licence but there are situations where permission is needed.

You may need to consider:

• Planning permission if the business changes the use of the property
• Landlord consent if you rent
• Mortgage lender consent if you own the property
• Local authority approval if customers visit

For example a quiet online consultancy is very different from a hair salon operating from a spare room with regular foot traffic.

Ignoring these issues can lead to disputes or enforcement action.

Childcare and education services

Businesses providing childcare education or training may require registration with regulators such as Ofsted.

This includes:

• Childminders
• Nurseries
• After school clubs
• Some training providers

Registration often involves background checks inspections and ongoing compliance with safeguarding standards.

Even informal arrangements can fall within regulatory scope so this area needs careful attention.

Financial and professional services

Some services are regulated because of the risk to consumers. This includes financial advice insurance mediation credit broking and some investment activities.

These businesses may need authorisation from regulators such as the Financial Conduct Authority.

This is a complex area and operating without authorisation can have serious consequences.

Not all advisory work is regulated but the boundaries matter. For example general business advice is different from regulated financial advice.

Health beauty and wellbeing businesses

Many health and beauty businesses require local authority registration or licensing.

Examples include:

• Tattoo studios
• Piercing studios
• Massage therapists
• Beauty salons using certain treatments

Local councils regulate these activities to ensure hygiene and safety standards are met. Premises inspections are common and conditions may apply.

Trades and construction related businesses

Some trades require specific licences certifications or registrations.

Examples include:

• Gas engineers needing Gas Safe registration
• Electricians working on certain installations
• Waste carriers needing registration
• Scaffolders and asbestos related work

Using subcontractors does not remove responsibility. The business must ensure work is carried out by appropriately licensed individuals.

Transport and vehicle based businesses

Businesses that transport people or goods may require permits or licences.

Examples include:

• Taxi and private hire drivers
• Courier businesses using certain vehicles
• Operators of larger commercial vehicles

Licensing can involve the local authority the DVLA or other bodies depending on activity.

Insurance requirements are also stricter in this area.

Environmental and waste related permits

Businesses that produce transport or dispose of waste may need environmental permits or registrations.

This includes:

• Waste carrier registration
• Environmental permits for certain processes
• Compliance with duty of care rules

Even small businesses can fall into this category for example builders gardeners or cleaners transporting waste.

Music entertainment and events

If your business involves music performance or events you may need licences related to copyright and public entertainment.

This can include:

• Music licences for playing recorded music
• Event licences for live performances
• Temporary event notices

These rules apply even to small venues or community events.

Online businesses and digital services

Many online businesses do not need traditional licences but still have regulatory obligations.

This may include:

• Data protection registration
• Consumer protection compliance
• Advertising standards rules

If you collect personal data you may need to register with the Information Commissioner’s Office. This is often overlooked but important.

Local authority licences and permissions

Many licences are issued at local level and requirements can vary between councils. This is why it is essential to check local authority guidance rather than relying on general advice alone.

Local councils commonly issue licences for:

• Street trading
• Market stalls
• Pavement seating
• Signage and advertising

Fees and conditions vary so early contact is sensible.

How to check what licences your business needs

The most reliable way to identify licensing requirements is to work through a structured approach.

Start by clearly defining your activities. Then check national guidance for your sector. Then check local authority requirements. Where uncertainty exists seek professional advice.

Useful steps include:

• Reviewing official guidance for your industry
• Checking your local council website
• Speaking to a business adviser or accountant
• Confirming requirements before trading

Do not rely solely on social media or informal advice. Regulations change and local rules differ.

Timing and applying for licences

Many licences must be obtained before trading begins. Others can be applied for alongside setup.

Applications often take time and may involve inspections or consultations. Build this into your business plan.

Operating while an application is pending is not always allowed so check carefully.

Renewals and ongoing compliance

Some licences are one off. Others require renewal periodic checks or ongoing reporting.

Missing renewals can invalidate permission to trade. A good system for tracking expiry dates is essential.

This is another area where professional support can be valuable.

How an accountant can help with licences and permits

While accountants do not issue licences they play an important role in helping businesses identify requirements early and integrate compliance into the wider setup.

An accountant can:

• Flag common licensing issues for your sector
• Help plan timelines realistically
• Ensure registrations align with tax setup
• Refer you to specialists where needed

This joined up approach avoids last minute surprises.

Common mistakes I see with licences and permits

Over the years I have seen several recurring issues.

One is assuming that being small or home based removes the need for permissions. Another is assuming that because someone else in the industry operates without a licence it must be acceptable. A third is applying too late and delaying trading unnecessarily.

Most of these problems arise from lack of clarity rather than deliberate non compliance.

The cost of getting it wrong

The consequences of missing licences vary but can be serious.

They can include:

• Fines or penalties
• Forced closure
• Loss of insurance cover
• Damage to reputation

These risks far outweigh the time and cost of getting it right upfront.

Final thoughts

Working out what licences or permits your small business needs can feel daunting especially when guidance is fragmented. However with a structured approach and early action it is entirely manageable.

The key is to focus on what your business actually does check both national and local requirements and seek advice where needed. Licences are not there to trip businesses up. They exist to set standards protect the public and create a level playing field.

From my experience businesses that address licensing properly from the start avoid disruption and build credibility more quickly. It is an investment in stability and trust.

If you treat licensing as part of your business foundations rather than an afterthought you will be in a far stronger position to grow with confidence.

You may also find our guidance on Do I need insurance to run a small business and Do I need to register my business name useful when exploring related small business questions. For a broader range of practical advice, you can visit our small business guidance hub.